Outset Medical, a medical technology company pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis, entered into two senior secured credit facilities with investment affiliates managed by SLR Capital Partners, which collectively provide for borrowings of up to $300 million, comprising up to a $250 million term loan facility and up to a $50 million asset-based revolving credit facility.
“We are pleased to have entered into this non-dilutive debt financing with favorable terms, enabling us to further strengthen our balance sheet,” Leslie Trigg, chair and CEO of Outset, said. “This agreement provides additional support and flexibility as we advance our mission to bring a technology-enabled, patient-centered approach to dialysis both in the acute and home settings.”
The term loan facility includes a committed $200 million that may be increased to $250 million and the asset-based revolving credit facility includes a committed $25 million that may be increased to $50 million, with any increase subject to certain milestones and SLR credit approval. The maturity date of the credit facilities is Nov. 1, 2027. The annual interest rate is equal to one-month term SOFR (subject to a floor of 2.75%), plus 5.15% under the term loan facility and 3.20% under the asset-based revolving credit facility. The term loan facility provides for at least 48 months of interest-only payments at closing, which can be extended to 54 months subject to certain financial milestones. Outset drew $100 million in funding under the term loan facility at closing. An additional $100 million is available to borrow under the credit facilities as of closing. In conjunction with securing these facilities from SLR, Outset retired its existing, cash-secured, debt facility from Silicon Valley Bank.
Armentum Partners served as financial advisor and Cooley served as legal counsel to Outset on the transaction.