SoftBank to Lead $1.2 Billion Investment in Invitae, Reports Dow Jones

(Bloomberg) -- SoftBank Group Corp. led an investment of $1.15 billion in genetic-testing company Invitae Corp. to help expand the use of its platform.

The funding will be in the form of convertible debt, Invitae said in a statement Monday. The convertible senior notes due in 2028 will have an initial conversion price of $43.18 per share, a 20% premium to the company’s trailing volume-weighted five-day average price as of April 1, according to the company. San Francisco-based Invitae’s shares have tripled in the past 12 months and closed Thursday at $39.19 in U.S. trading, pushing its market valuation to $7.7 billion. The stock jumped 5.4% Monday morning in New York.

“With the support of our long-term shareholders, we’re creating the platform to support the routine use of genetics in mainstream medicine to result in better healthcare for everyone,” said Sean George, co-founder and chief executive officer.

SoftBank founder Masayoshi Son has been expanding his investments in publicly traded companies in recent months, including in Amazon.com Inc., Facebook Inc. and Alphabet Inc. Bloomberg News reported in February that the Japanese-based company planned to spend billions of dollars investing in the biotech and health-care sector. The Invitae investment was made through SoftBank’s asset management group, SB Management, which earlier this year also took a stake of about 6% in Pacific Biosciences of California Inc., a DNA-sequencing company. As of Dec. 31, SoftBank’s public holdings also included 4D Molecular Therapeutics Inc. and AbCellera Biologics Inc.

Son had previously set up a $100 billion Vision Fund to invest in private startups, making bets on companies such as Didi Chuxing and DoorDash Inc.

While SB Northstar was forced to wind down controversial derivative positions in big tech companies after a backlash from investors, it has taken equity stakes in a variety of other businesses. It recently invested in Norway-based education software provider Kahoot! AS, and bought one-tenth of Swedish cloud-based platform provider Sinch AB.

Widely followed investor Catherine Wood is the biggest holder of Invitae shares through her exchange-traded fund Ark Innovation ETF, which owns about 14%, according to data compiled by Bloomberg. Wood told CNBC earlier this month that Invitae is one of the fund’s most under appreciated holdings.

Invitae offers genetic testing for a range of diseases, including hereditary cancer, cardiology, neurology, pediatric genetics, as well as reproductive health in the U.S. and abroad. Invitae also announced Monday that it is buying Genosity Inc., a company that offers software and laboratory solutions, for $200 million.

J. Wood Capital Advisors LLC and Perella Weinberg Partners LP acted as financial advisors and J.P. Morgan acted as placement agent to Invitae on the transaction.

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