Atlantic Park Capital Fund provided a $250 million senior secured term loan and Citibank provided a $150 million asset-based loan to TEAM, a provider of integrated, digitally-enabled performance solutions, to refinance the company’s existing debt facilities.
The ABL credit facility and the term loan are subject to customary closing conditions. In connection with the closing of the new debt facilities, TEAM plans to retire its previous senior secured credit facility, including the revolving credit facility and the associated term loan.
Evercore served as the exclusive financial advisor to TEAM on the transaction. Atlantic Park was the lead arranger of the term loan and Citibank served as the administrative agent for the ABL facility.
TEAM also entered into separate, privately-negotiated transactions with certain holders of its existing 5% convertible senior notes due 2023 to repurchase approximately $137 million aggregate principal amount of the convertible notes for approximately $136 million (plus accrued and unpaid interest to the repurchase date). Following the repurchases, approximately $93 million aggregate principal amount of the convertible notes will remain outstanding. The convertible notes repurchases are expected to close on Dec. 22, 2020, subject to customary closing conditions.
“These transactions represent a significant step towards optimizing our capital structure,” Amerino Gatti, chairman and CEO of TEAM, said. “The successful execution of our debt refinancing provides considerable financial flexibility and extends the company’s debt maturity profile. Our new capital structure gives us sufficient liquidity to support our working capital needs, execute on our growth priorities and create long-term shareholder value. Despite this time of uncertainty, TEAM was able to refinance and extend the debt maturities due to the successful implementation of our cost management programs and by delivering operational excellence to our clients. We can now turn our complete attention to maximizing growth opportunities as the economy and our end-markets rebound.
“We are pleased to have the support of Atlantic Park, who provided the term loan, and Citibank, who led the ABL credit facility. Their commitment is a significant vote of confidence in our business model and outlook.”
TEAM intends to use the proceeds from the term loan and the ABL facility to repay in full the previous bank credit facility, fund the repurchase of a portion of its outstanding convertible notes, pay fees and expenses in connection with the term loan and the ABL facility, and for general corporate purposes.
In connection with the senior secured term loan, the company issued to Atlantic Park a warrant to purchase up to 9.9% of the company’s pro forma fully diluted shares of common stock at an exercise price of $7.75 per share. The warrant has a 7.5-year term.
The ABL facility matures and all outstanding amounts become due and payable on Dec. 18, 2024, provided that if the convertible notes have an aggregate outstanding principal amount of $50 million or more 120 days prior to their maturity date or if there are convertible notes outstanding in an aggregate principal amount of less than $50 million and the company does not have an agreed amount of availability under the ABL credit facility on the trigger date, the ABL will terminate on the trigger date. The term loan matures and all outstanding amounts become due and payable on Dec. 18, 2026, provided that to the extent that the convertible notes have an aggregate outstanding principal amount of $50 million or more on the trigger date, the term loan will terminate on the trigger date.
