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Invitae Surges as SoftBank Leads $1.15 Billion Investment

Invitae says a $1.15 billion investment from a Softbank-led group will support the medical-genetics company's growth opportunities.
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SoftBank Group  (SFTBY)  is heading up a $1.15 billion investment in Invitae  (NVTA) - Get Invitae Corporation Report to support growth initiatives, the medical genetics company said on Monday.

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Under the terms of the investment, the participating investors, including the Tokyo investment firm's SB Management subsidiary, will buy $1.15 billion face amount of convertible senior notes due 2028. 

The notes will have an initial conversion price of $43.18 a share, representing a 20% premium to Invitae's average five-day trailing volume-weighted average price as of April 1.

Shares of the San Francisco company at last check moved up 5% to $41.16. Invitae’s shares have tripled in the past 12 months.

The notes will mature on April 1, 2028, unless earlier converted, redeemed or repurchased, and bear 1.5% interest a year. 

J. Wood Capital Advisors and Perella Weinberg Partners were financial advisers and JPMorgan was placement agent for Invitae on the transaction.

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Invitae is "creating the platform to support the routine use of genetics in mainstream medicine to result in better health care for everyone," Sean George, co-founder and CEO of Invitae, said in a statement.

In February, Pacific Biosciences of California  (PACB) - Get Pacific Biosciences of California Inc. Report disclosed that SB Management was investing $900 million in the genetic-analysis company.

In addition, SoftBank backed Coupang  (CPNG) - Get Coupang Inc. Class A Report, South Korea's largest e-commerce company. SoftBank's $100 billion Vision Fund owns 35.1% of Coupang.

SoftBank made a $1 billion investment in the company in 2015 and Vision Fund put another $2 billion into the company in 2018.

Investor Cathie Wood is the biggest holder of Invitae shares through her exchange-traded fund ARK Innovation ETF, which owns about 14%, according Bloomberg. 

Oppenheimer analyst Kevin DeGeeter upgraded Invitae to outperform from perform with a $48 price target. He cited Invitae's valuation following a first-quarter pullback for the shares and the diagnostic sector.

Regarding the SoftBank investment, the analyst said Invitae may be "adequately capitalized to fund its aggressive expansion plan through to profitability," according to the Fly.

Separately, Invitae said it had agreed to acquire the Iselin, N.J., genomics company Genosity for $200 million of cash and stock.