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Crystal Financial Provides $15MM Term Loan to Turtle Beach Corporation

July 23, 2015, 07:53 AM
Filed Under: Manufacturing

Turtle Beach Corporation, a leading-edge audio technology company and #1 in gaming audio, announced the successful completion of a new $15 million term loan and amendments to its existing subordinated notes, $13.8 million of which will remain outstanding, which taken together with its existing $60 million revolving credit facility are anticipated to fund the company's growth for the next several years.

Turtle Beach designs and markets premium audio peripherals for video game, personal computer, and mobile platforms, including its acclaimed line of Ear Force gaming headphones and headsets crafted for Xbox 360 and PS3 game consoles and PC games. Turtle Beach's limited edition, Ear Force Tango wireless headset was recognized as an honoree by the 2013 International CES Innovations Awards. According to the NPD Group, Turtle Beach manufactures the top five best-selling third-party gaming headsets of all time when ranked in dollar sales. The Ear Force X12 wired headset is the No. 1 best-selling third-party gaming headset of all time.

The net proceeds of the $15 million Term Loan with Crystal Financial will be used to repay $4 million of the outstanding subordinated debt held by affiliates of Stripes Group LLC ("Stripes") and for general corporate purposes. $13.8 million of subordinated debt held by affiliates of Stripes will remain outstanding with maturities extended to 2019 and an interest rate of LIBOR plus 10.25% to align with the new term loan. The company approved a grant to those affiliates of Stripes for warrants to purchase approximately 1.7 million shares of common stock with an exercise price set at $2.54, a 20% premium to the closing price on July 21, 2015, as consideration for the amended terms. The warrants represent 4% of the currently outstanding shares and increase the number of fully diluted shares from approximately 48.7 million to approximately 50.4 million. In connection with the term loan, the company also amended its revolving credit facility with Bank of America Merrill Lynch.

Stripes is a private equity firm focused on internet, software, healthcare IT and branded consumer products businesses and is the largest shareholder of Turtle Beach. Kenneth A. Fox, a director of Turtle Beach, is the managing general partner of Stripes, and Ronald Doornink, Chairman of the Board of Turtle Beach, is an operating partner of Stripes. Collectively, affiliates of Stripes Group LLC own, of record, approximately 43.7% of the Company's outstanding shares.

Crystal Financial LCC, a portfolio company of Solar Capital Ltd., is an independent commercial finance company that provides senior and junior secured loans for both asset-based and cash flow financings to middle market companies. It has underwritten, closed and managed more than $20 billion in secured debt commitments across a wide range of industries. For more information please visit

Turtle Beach Corporation designs leading-edge audio products for the consumer, commercial and healthcare markets. Under the Turtle Beach brand, the company markets a wide selection of quality gaming headsets catering to a variety of gamers' needs and budgets, for use with video game consoles, including officially-licensed headsets for the Xbox One and PlayStation®4, as well as for personal computers and mobile/tablet devices.

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