Medical Action Industries Closes New Facility with Wells Fargo
Medical Action Industries announced that it entered into a new five-year credit agreement for $65 million with Wells Fargo. The new credit facility refinances and replaces the previous agreement which had been scheduled to expire in June 2014 and which had approximately $54.6 million outstanding as of May 17, 2013.
The new agreement includes a revolving line of credit, a term loan A and a term loan B. It also gives the company the ability to increase the size of the loan in certain circumstances, such as acquisitions. This new financing provides improved pricing, tenor and operating flexibility, and positions the Company to further execute on its strategic plans.
John Sheffield, executive vice president and chief financial officer, said, “We are very happy to continue and deepen our relationship with Wells Fargo, who was a member of our previous bank group. The benefits achieved through this agreement support and reinforce our strategic plans to position Medical Action for continued growth and to reduce our operating costs. With this new facility, we have removed many of the restrictive covenants and other obligations inherent in the previous agreement. We will experience lower interest rates, substantially reduced principal payments on the term loan component, improved working capital and will no longer be required to engage the outside consultant mandated by the previous agreement, which alone represents a nearly $2.0 million savings annually.”
Medical Action is a diversified manufacturer and distributor of disposable medical devices and a leader in many of the categories in which it competes.