Treace Medical Concepts, a medical technology company focused on the surgical treatment of hallux valgus (commonly known as bunions), entered into a new five-year, $150 million loan arrangement with MidCap Financial. The loan consists of up to $120 million in term loans and a $30 million revolving credit facility.
Treace Medical Concepts used proceeds from the new term loan to refinance its existing $30 million term loan from CR Group. In addition, the new revolving credit facility will expand Treace Medical Concepts’ revolving credit capacity and replace its undrawn existing $10 million revolving credit facility from Silicon Valley Bank.
“We are pleased to secure this non-dilutive debt financing with favorable terms, providing us up to $150 million to further strengthen our balance sheet and provide financial flexibility as we execute on our commercial strategies and drive growth,” John T. Treace, CEO, founder and board member of Treace Medical Concepts, said. “We are committed to becoming the standard of care in bunion surgery and this financing provides us with a capital-efficient vehicle to continue to develop our market, invest in our business and meaningfully gain share.”
Treace Medical Concepts’ new loan agreement includes a maturity date of five years for both the term loan and revolving credit facility. The company drew $54 million at closing and used a portion of the proceeds to refinance its existing $30 million debt facility. The annual interest rate is equal to adjusted term SOFR subject to a floor of 1% and a cap of 3%, plus 6% under the term loan and 4% under the revolving loan. The term loan provides for at least 48 months of interest-only at close, which can be extended to 60 months.
With the completion of this refinancing, Treace Medical Concepts now has cash and access to liquidity of approximately $220 million.
Armentum Partners served as financial advisor to Treace Medical Concepts on the transaction.
