Patient Square Capital’s Investment in Eargo Strategic

Ropes & Gray represented Patient Square Capital in the deal.

Patient Square Capital announced a strategic investment in hearing loss medical device company Eargo, Inc. to raise up to $125 million through the sale of senior secured convertible notes.

Under the agreement announced on June 27, within six months of Patient Square Capital’s first tranche investment, Eargo expects to undertake a rights offering under which the stockholders can buy their pro rata share of $375 million newly issued shares of common stock at $0.50 per share. Proceeds from a rights offering are intended to be used to redeem the notes and for general corporate purposes. In the event the rights offering is not fully subscribed, the remaining notes not redeemed in the rights offering will convert into shares of common stock.

Eargo is a medical device company dedicated to improving the quality of life of people with hearing loss. Its innovative product and go-to-market approach address the major challenges of traditional hearing aid adoption, including social stigma, accessibility and cost. 

Patient Square Capital is a dedicated health care investment firm that partners with best-in-class management teams whose products, services and technologies improve health. Patient Square utilizes deep industry expertise, a broad network of relationships and a true partnership approach to make investments in companies that will grow and thrive.

The Ropes & Gray team was led by capital markets and M&A partner Tom Fraser (Picture) and private equity partners Jay Freedman and Alex Zeltser and included tax partner Ben Rogers, litigation & enforcement partners Andrew O’Connor and Dan McCaughey, capital markets and M&A partner Tom Holden, private equity partner Sam Badawi, business restructuring partner Ryan Dahl, tax counsel Sara Clevering and private equity associates Patrick Prin and Bethany Hickey.

Involved fees earner: Sam Badawi – Ropes & Gray; Sara Clevering – Ropes & Gray; Ryan Preston Dahl – Ropes & Gray; Thomas Fraser – Ropes & Gray; Jason Freedman – Ropes & Gray; Bethany Hickey – Ropes & Gray; Thomas Holden – Ropes & Gray; Daniel McCaughey – Ropes & Gray; Andrew O’Connor – Ropes & Gray; Patrick Prin – Ropes & Gray; Benjamin Rogers – Ropes & Gray; Alex Zeltser – Ropes & Gray;

Law Firms: Ropes & Gray;

Clients: Patient Square Capital;