TEAM, a provider of specialty industrial services offering a suite of conventional, specialized and proprietary mechanical, heat-treating and inspection services, secured committed financing from two of its largest current stakeholders for a series of transactions that, once completed, are expected to improve its capital structure and extend maturities.

First, TEAM entered into a commitment letter with Corre Management Partners for a $57.5 million, 12% senior secured first lien term loan maturing in December 2026 and comprised of a $37.5 million term loan tranche and a $20 million delayed draw term loan tranche, subject to certain closing conditions. The Corre commitment letter also provides that Corre’s existing subordinated term loan will become secured on a pari passu basis to the Corre secured term loan. TEAM expects to use the proceeds from the Corre secured term loan to repay in full its remaining $41 million of convertible notes due August 2023 and for general corporate purposes.

TEAM also entered into a commitment letter with Eclipse Business Capital for a $27.4 million term loan secured by certain real estate and machinery and equipment of the company, subject to certain closing conditions, and with a maturity date coterminous with the company’s existing revolving credit facility. The Eclipse commitment letter also provides for an amendment to the existing revolving credit facility to extend the maturity date of the revolving credit facility (and therefore the proposed Eclipse term loan) to August 2025 and to increase availability under the revolving credit facility by an additional $2.5 million. TEAM expects to use the proceeds from the Eclipse term loan, together with advances under the company’s revolving credit facility, to repay in full the company’s existing senior secured term loan with Atlantic Park Strategic Capital Fund.

The closing of the term loan facilities and related amendments to existing credit facilities is expected to occur in Q2/23 and is subject to the negotiation of definitive documentation and the satisfaction of customary conditions prior to closing.

“Addressing our capital structure has been one of our top priorities in our ongoing program to improve liquidity and strengthen TEAM’s balance sheet,” Keith D. Tucker, CEO of TEAM, said. “A key step in that process was securing a refinancing solution for our $41 million of convertible notes maturing in August of 2023. We are very pleased to announce committed financing that provides $87.4 million in funding, allowing for the payoff of our convertible notes and our existing $36 million senior secured term loan, while also extending our next debt maturity to August 2025. Once completed, we believe these transactions should remediate the conditions that led to the going concern disclosure in our 2022 fiscal year end annual report and our most recent quarterly report and provide the runway to continue successfully implementing our turnaround plan designed to further lower our cost structure and improve profitability and cash flow.”

Kirkland & Ellis and Evercore Partners are advising TEAM in connection with these transactions.