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MidCap Financial Provides $150MM Debt Financing to Treace Medical Concepts

May 02, 2022, 08:00 AM
Filed Under: Medical
Related: MidCap Financial

Treace Medical Concepts entered into a new five-year $150 million loan arrangement with MidCap Financial, comprising up to $120 million in term loans and a $30 million revolving credit facility. Proceeds from the new term loan refinanced the Company’s existing $30 million term loan from CR Group LP. In addition, the new revolving credit facility will expand the Company’s revolving credit capacity and replace the undrawn existing $10 million revolving credit facility from Silicon Valley Bank.

“We are pleased to secure this non-dilutive debt financing with favorable terms, providing us up to $150 million to further strengthen our balance sheet and provide financial flexibility as we execute on our commercial strategies and drive growth,” said John T. Treace, CEO, Founder and Board Member of Treace. “We are committed to becoming the standard of care in bunion surgery and this financing provides us with a capital-efficient vehicle to continue to develop our market, invest in our business, and meaningfully gain share.”

The Company’s new loan agreement includes a maturity date of five years for both the term loan and revolving credit facility. The Company drew $54 million at the closing and used a portion of the proceeds to refinance its existing $30 million debt facility. The annual interest rate is equal to Adjusted Term SOFR1 subject to a floor of 1% and a cap of 3%, plus (1) 6% under the term loan and (2) 4% under the revolving loan. The term loan provides for at least 48-months of interest-only at close, which can be extended to 60-months.

With the completion of this refinancing, the Company now has cash and access to liquidity of approximately $220 million.

Armentum Partners served as financial advisor to Treace on the transaction. Additional detail regarding the foregoing financing is set forth in the Company’s Current Report on Form 8-K, filed today with the SEC.

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