Innovatus Capital Partners and East West Bank put up $30 million in debt financing and Innovatus took out a $3 million equity position in Billerica, Mass.-based ConforMIS. The proceeds are earmarked for paying down a $15 million term loan from Oxford Finance and general corporate purposes, the company said.
The five-year loans came in two parts, a $20 million term loan from Innovatus with an interest-only period of four years and a $10 million credit revolver with East West based on the accounts receivable borrowing base. Innovatus paid $3.87 per share for its stake in ConforMIS, which was the June 24 closing price on CFMS shares.
“We are pleased to have the confidence and support of Innovatus and East West Bank, who have significant expertise in healthcare and a strong presence in the life science space,” CFO Paul Weiner said in prepared remarks. “This financing provides the funding in a capital-efficient manner to further develop our commercialization strategy and strengthens our ability to bring the benefits of patient specific implants to orthopedic surgeons and the patients they serve.”
“Conformis’ proprietary iFit Image-to-Implant technology for patient-specific joint replacement implants has the potential to disrupt an $18 billion orthopedics industry by solving for the shortcomings of conventional ‘off-the-shelf’ total knee replacement procedures, where one in five patients are not satisfied with the results,” added Innovatus managing director Claes Ekstrom. “We are excited to support Conformis’ ongoing mission to achieve better patient outcomes and lower healthcare costs.”
Armentum Partners advised on the deal, ConforMIS said.
CFMS shares were up 3.6% to $3.98 apiece today in mid-morning trading.