The fully committed credit facility is expected to close, subject to customary conditions, in June 2018 and will provide significant incremental liquidity compared to the company’s existing agreements.
“As we execute plans to streamline the company, invigorate our channel strategy and bring new products to market, we saw the need for greater financial flexibility and long-term growth capital – which this credit facility will ensure,” said Mark Messner, Summer Infant CEO. “We appreciate the continued support by Bank of America and are excited to partner with them and Pathlight Capital to strengthen our outlook and process improvement initiatives.”
The $60 million senior revolving credit facility with Bank of America will have a five-year term, with interest accruing at either LIBOR plus an applicable margin of 1.75% or 2.00%, depending on average quarterly. The revolving credit facility will be secured by a first priority lien on the company’s assets, other than assets secured by the term loan.
The $17.5 million term loan with Pathlight Capital will also have a five-year term and accrue interest at three-month LIBOR + 9.00%. The term loan will be secured by a first priority lien on the company’s intellectual property, equipment and interests in its subsidiaries and amortize at 5% per year, payable quarterly, beginning December 1, 2018.
Proceeds from the credit facility will be used to refinance existing indebtedness, pay any transaction costs and to finance ongoing working capital needs. The closing of the revolving credit facility and the term loan remain conditional upon receipt by the lenders of certain final deliverables, including the execution of definitive loan and security documentation, minimum available liquidity and completion of any remaining diligence.
OceanArc Capital Partners acted as Summer Infant’s exclusive financial advisor on the transaction.
Based in Woonsocket, RI, Summer Infant manufactures and distributes premium infant and juvenile products which are sold principally to large North American and international retailers.