IRVINE, Calif.--(BUSINESS WIRE)--
Endologix, Inc. (Nasdaq:ELGX), a developer and marketer of innovative
treatments for aortic disorders, today announced that it has entered
into an agreement with Deerfield Management ("Deerfield"), a leading
healthcare investment organization, to provide Endologix with up to $170
million in funding through a $120 million six-year secured term loan and
a $50 million three-year secured asset-based revolving line of credit.
Under the term loan, Deerfield provided Endologix with $120 million of
gross proceeds in funding. Endologix has agreed to pay Deerfield a yield
enhancement payment equal to 2.25% of the principal amount at the time
of funding. The outstanding principal accrues interest until maturity on
April 2, 2023 at a rate of 6.87% per annum, payable quarterly in arrears
commencing on July 1, 2017 and on the first business day of each
calendar quarter thereafter, unless repaid earlier. In addition, on each
of April 2, 2021, April 2, 2022 and the maturity date, Endologix must
make an amortization payment equal to $40 million (or, if on the
maturity date, the remaining outstanding amount of the term loan).
Endologix may, at its option, repay the term loan at any time. Any
prepayment prior to April 2, 2021 shall require a make-whole payment and
any prepayment made on or after April 2, 2021 may be made without
premium or penalty (unless in connection with a change in control of
Endologix estimates that the net proceeds from the term loan will be
$113 million, after deducting estimated transaction expenses. Endologix
intends to use approximately $52.5 million of the net proceeds from the
term loan to repurchase $53.1 million aggregate principal amount of
outstanding 2.25% Convertible Senior Notes due 2018, plus the accrued
but unpaid interest thereon, from the holders thereof in privately
negotiated transactions. These note repurchases are expected to settle
on April 10, 2017. The Company also intends to enter into an unwind
agreement with Bank of America, N.A. in order to unwind a portion of the
capped call transactions in respect of the notes to be repurchased.
Endologix intends to use the remainder of the net proceeds from the term
loan for working capital and general corporate purposes.
At the closing of the term loan, Endologix issued Deerfield warrants to
purchase up to 6.47 million shares of its common stock at an exercise
price of $9.23 per share (or 127.5% of the closing price of Endologix's
common stock on the trading day prior to the closing date). The shares
of common stock subject to these warrants represent approximately 7.8%
of Endologix's approximately 83 million outstanding shares on the
Under the terms of the revolving line of credit, Endologix may borrow up
to the lesser of $50 million or its applicable borrowing base from time
to time. Any outstanding principal under the revolving line of credit
will accrue interest at a rate equal to the LIBOR Rate plus 4.60%.
Endologix is subject to other fees in addition to interest on
outstanding principal under the revolving line of credit. This revolving
line of credit will replace Endologix's $50 million asset-based
revolving line of credit with MidCap Financial Trust.
Perella Weinberg Partners and J. Wood Capital Advisors served as
financial advisors to Endologix in connection with this credit facility.
Endologix expects to file a Current Report on Form 8-K with the
Securities and Exchange Commission that will contain a more detailed
disclosure concerning this credit facility.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall it constitute
an offer, solicitation, or any sale in any jurisdiction in which such
offer, solicitation, or sale is unlawful.
About Endologix, Inc.
Endologix, Inc. develops and manufactures minimally invasive treatments
for aortic disorders. The Company's focus is endovascular stent grafts
for the treatment of abdominal aortic aneurysms (AAA). AAA is a
weakening of the wall of the aorta, the largest artery in the body,
resulting in a balloon-like enlargement. Once AAA develops, it continues
to enlarge and, if left untreated, becomes increasingly susceptible to
rupture. The overall patient mortality rate for ruptured AAA is
approximately 80%, making it a leading cause of death in the United
States. For more information, please visit www.endologix.com.
Deerfield is an investment management firm committed to advancing
healthcare through investment, information and philanthropy. For more
information, please visit www.deerfield.com.
This communication includes statements that may be "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, including statements about the funding arrangement,
credit facility, and other agreements with Deerfield, and the expected
funding and related actions thereunder, and Endologix's expectations
regarding the use of proceeds, the accuracy of which are necessarily
subject to risks and uncertainties, all of which are difficult or
impossible to predict accurately and many of which are beyond the
control of Endologix. Many factors may cause actual results to differ
materially from those projected in forward-looking statements. All
forward-looking statements are expressly qualified in their entirety by
this cautionary statement. Undue reliance should not be placed on
forward-looking statements, which speak only as of the date they are
made. Endologix undertakes no obligation to update any forward-looking
statements to reflect new information, events, or circumstances after
the date they are made, or to reflect the occurrence of unanticipated
events. Please refer to Endologix's Annual Report on Form 10-K for the
year ended December 31, 2016, and Endologix's subsequent filings with
the Securities and Exchange Commission, for more detailed information
regarding these risks and other factors that may cause actual results to
differ materially from those expressed or implied.
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Source: Endologix, Inc.
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