NeoGenomics has closed on a new five-year, $150 million senior secured credit facility, which includes a $75 million revolving loan and a $75 million term loan. The new facility replaces the $54.6 million term loan and undrawn $25 million asset-based revolver previously in place.
The company borrowed $97.9 million at closing, including $75 million of term debt and $22.9 million under the revolver. The proceeds of this facility combined with approximately $16 million of cash were used to retire the existing $54.6 million term loan, redeem 8,066,667 shares of series A redeemable preferred stock held by an affiliate of General Electric for $55 million, and to pay certain fees and expenses.
Amounts drawn under this new facility bear interest according to a pricing grid that is based on the ratio of debt to Adjusted EBITDA (as defined in the credit agreement), and is currently equal to LIBOR + 300 basis points, which compares with LIBOR + 700 basis points under the previous term loan.
The new credit facility was jointly led by Regions Capital Markets, Merrill Lynch, Pierce, Fenner & Smith and Wells Fargo Securities. Regions Bank served as administrative agent, and Bank of America and Wells Fargo Bank served as co-syndication agents. Hancock Bank, The Huntington National Bank and PNC Bank, served as co-documentation agents. Cadence Bank, Franklin Synergy Bank and Seaside National Bank and Trust also are participating lenders in this new facility.
Stephens advised NeoGenomics in the transaction.
Douglas M. VanOort, the company’s chairman and CEO, said, “We are very pleased to have executed this new bank facility. It has allowed us to redeem 55% of the series A preferred stock resulting from our acquisition of Clarient one year ago and reduce our adjusted diluted shares outstanding by 8.5%. This facility also reduces our weighted average cost of senior debt capital to roughly half the previous level. We look forward to working with our new bank syndicate as we continue to grow NeoGenomics into the leading cancer testing lab in the world.”
Fort Myers, FL-based NeoGenomics specializes in cancer genetics testing and information services.