Kestra Medical Technologies, Ltd. Announces Full Exercise and Closing of Underwriters' Over-Allotment Option in Initial Public Offering

Rhea-AI Summary

Kestra Medical Technologies (KMTS), a wearable medical device and digital healthcare company, has announced the full exercise of the underwriters' over-allotment option in its Initial Public Offering (IPO). The underwriters purchased an additional 1,782,352 shares at $17.00 per share.

Following this over-allotment exercise, the total IPO size reached 13,664,704 shares, generating total gross proceeds of approximately $232 million before deducting underwriting discounts, commissions, and other offering expenses.

The offering's lead bookrunners were BofA Securities, Goldman Sachs & Co. , and Piper Sandler, with Wells Fargo Securities and Stifel acting as bookrunners, and Wolfe | Nomura Alliance as co-manager. The registration statement became effective on March 5, 2025.

Positive

• Successful completion of IPO with full exercise of over-allotment option
• Substantial capital raise of $232 million in gross proceeds
• Strong underwriter support from major investment banks

Negative

• Potential dilution for existing shareholders due to large share issuance
• Significant offering expenses and underwriting fees will reduce net proceeds

Insights

Financial Analyst

Kestra Medical Technologies' announcement represents a strongly positive signal for the company's market debut. The full exercise of the over-allotment option (often called the "greenshoe") is significant as it indicates robust investor demand exceeding initial expectations. This allowed Kestra to raise approximately $232 million in gross proceeds, 15% more than would have been possible without the over-allotment exercise.

The participation of premier investment banks as bookrunners - BofA Securities, Goldman Sachs, Piper Sandler, Wells Fargo, and Stifel - lends additional credibility to this offering. The full exercise occurring just days after the initial offering suggests institutional investors see substantial potential in Kestra's business model and growth prospects.

For Kestra, this capital infusion provides substantial financial flexibility to execute its strategic initiatives in the competitive wearable medical device and digital healthcare space. The $232 million represents a significant war chest that strengthens Kestra's balance sheet and provides runway to potentially accelerate R&D, expand manufacturing capabilities, and pursue market penetration strategies without near-term capital constraints.

The $17.00 per share offering price and current trading at $20.41 represents a 20.1% post-IPO appreciation, further validating strong market reception. This successful capital raise positions Kestra as a well-funded competitor in the growing digital health ecosystem.

Healthcare Industry Expert

Kestra's successful IPO represents a significant development in the wearable medical device landscape. As a company focused on the intersection of wearable technology and digital healthcare, Kestra operates in one of the most promising segments of the medical technology market.

The substantial capital raise of $232 million provides Kestra with a competitive advantage in an industry where R&D expenditure and regulatory approval pathways often require significant financial resources. Medical wearables typically face lengthy development cycles, clinical validation requirements, and complex regulatory hurdles - all capital-intensive processes that this funding can help address.

The strong market demand demonstrated by the full over-allotment exercise suggests institutional investors recognize the potential of Kestra's approach to wearable healthcare technology. In the medical device sector, this level of backing is particularly valuable as it can facilitate not just product development but also the important clinical validation studies and regulatory submissions necessary for market access.

This funding positions Kestra to potentially advance its product portfolio, expand clinical evidence generation, and build out its commercial infrastructure - three critical components for success in the medical wearables space. The market reception also suggests confidence in Kestra's ability to navigate the complex healthcare reimbursement landscape, often a significant barrier for medical technology companies.

KIRKLAND, Wash., March 14, 2025 (GLOBE NEWSWIRE) -- Kestra Medical Technologies, Ltd. (“Kestra”), a wearable medical device and digital healthcare company, announced today that the underwriters of Kestra’s initial public offering exercised in full their previously disclosed over-allotment option and have purchased 1,782,352 shares of common stock at a public offering price of $17.00 per share. After giving effect to the sale of over-allotment option, the total number of shares sold by Kestra in the initial public offering was 13,664,704 and the total gross proceeds from the offering, before deducting underwriting discounts and commissions and other offering expenses payable by Kestra, were approximately $232 million. The issuance and sale of the over-allotment option closed today.

BofA Securities, Goldman Sachs & Co. LLC and Piper Sandler acted as lead bookrunners for the offering. Wells Fargo Securities and Stifel acted as bookrunners and Wolfe | Nomura Alliance acted as co-manager for the offering.

A registration statement relating to the common shares sold in this offering was filed with the Securities and Exchange Commission and became effective on March 5, 2025. The offering was made only by means of a prospectus. Copies of the prospectus may be obtained from BofA Securities, Attention: Prospectus Department, NC1-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, or by email at dg.prospectus_requests@bofa.com; from Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, by facsimile at 212-902-9316, by email at Prospectus-ny@ny.email.gs.com, or by calling 1-866-471-2526; or Piper Sandler, by email at prospectus@psc.com, or by calling (800) 747-3924.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Kestra

Kestra Medical Technologies, Ltd. is a commercial-stage wearable medical device and digital healthcare company focused on transforming patient outcomes in cardiovascular disease using monitoring and therapeutic intervention technologies that are intuitive, intelligent, and connected.

Disclaimer

“Wolfe | Nomura Alliance” is the marketing name used by Wolfe Research Securities and Nomura Securities International, Inc. in connection with certain equity capital markets activities conducted jointly by the firms. Both Nomura and Wolfe Research Securities are serving as underwriters in the offering described herein. In addition, Wolfe Research Securities may provide sales support services, investor feedback, investor education, and/or other independent equity research services in connection with the offering.

Investor Contact

Neil Bhalodkar
neil.bhalodkar@kestramedical.com

FAQ

How much did Kestra Medical Technologies (KMTS) raise in their IPO including the over-allotment?

Kestra raised approximately $232 million in gross proceeds through the sale of 13,664,704 shares at $17.00 per share, including the full exercise of the over-allotment option.

How many additional shares were sold through KMTS's over-allotment option?

The underwriters purchased 1,782,352 additional shares through the full exercise of the over-allotment option.

What was the IPO price for Kestra Medical Technologies stock?

Kestra Medical Technologies shares were priced at $17.00 per share in the IPO.

Who were the lead underwriters for the Kestra Medical Technologies IPO?

BofA Securities, Goldman Sachs & Co. , and Piper Sandler acted as lead bookrunners for the offering.

When did Kestra Medical Technologies' IPO registration statement become effective?

The registration statement became effective on March 5, 2025.