Money in the facility will be provided through a $120 million 6-year secured term loan and a $50 million 3-year secured asset-based revolving line of credit, the Irvine, Calif.-based company said.
Under the loan facility, Deerfield will provide Endologix with $120 million or gross proceeds in funding, with Endologix agreeing to pay Deerfield a yield enhancement payment equal to 2.25% of the principal amount at the time of funding. Endologix can, at its option, repay the loan at any time.
The company said it expects to see net proceeds from the term loan of $113 million after deducting estimated transaction expenses, with approximately $52.5 million of the proceeds slated to fund the repurchasing of $53.1 million aggregate principal amount of outstanding 2.25% convertible senior notes due 2018.
Endologix said it intends to enter an unwind agreement with Bank of America to unwind a portion of the capped call transactions in respect of the notes to be repurchased.
The remainder of the proceeds from the facility will be used to support working capital and general corporate purposes, according to a press release.
Endologix issued Deerfield warrants to purchase up to 64.7 million shares at $9.23 per share at the closing of the term loan, the company said.
The news comes shortly after Endologix saw shares slip in response to the GOP’s healthcare reform proposal. The proposal would do away with the AAA screening coverage, shifting the cost of the test to patients, which could in turn affect AAA repair procedure volumes.
Investors reacted by pushing share prices down yesterday on Wall Street for Endologix, Lombard Medical Technologies (NSDQ:EVAR) and C.R. Bard (NYSE:BCR), although the stocks have recovered somewhat today.
ELGX clawed back some value, after closing down -7.2% yesterday at $6.66 per share, rising 4.8% to $6.98 each.