Harrow, a U.S. eyecare pharmaceutical company, entered into a $100 million secured credit financing agreement with funds managed by Oaktree Capital Management.
The interest-only secured credit facility carries an interest rate equal to the three-month secured overnight financing rate (SOFR) plus 6.5%, includes flexible terms and covenants, and is expected to mature in approximately three years.
Harrow used a portion of the proceeds from the new facility to pay off indebtedness under Harrow’s existing secured loan with an affiliate of B. Riley Financial, with the remainder to be used for future milestone payments related to a recently announced acquisition and for general corporate purposes.
“We are pleased to enter into this credit facility, which strengthens our balance sheet and provides us the flexibility needed to pursue additional acquisitions in alignment with our growth strategy,” Mark L. Baum, chairman and CEO of Harrow, said. “We are grateful for the confidence and support of Oaktree, and we look forward to working closely with them as a strong financial partner.”
“We are excited to partner with Harrow during this transformational period in its history marked by the recent FDA approval, J-Code assignment, pass-through reimbursement status approval, and upcoming launch of IHEEZO, as well as their other recent product acquisitions,” Steve DeNelsky, managing director of life sciences lending at Oaktree, said. “We are enthusiastic about Harrow’s growth strategy and believe this extension of capital supports the Harrow leadership team as it continues to solidify its position as a leading U.S. eyecare pharmaceutical company.”
In January, B. Riley Financial provided $59.75 million in debt financing to Harrow to support an acquisition of the exclusive commercial rights to five FDA-approved ophthalmic products. B. Riley Securities also served as lead left book-running manager in equity and senior notes offerings in December 2022 which raised $65.25 million in aggregate gross proceeds to fund a portion of the purchase price of Harrow’s acquisition.
“We congratulate the Harrow team on this landmark transaction which extends its leadership in the U.S. ophthalmic pharmaceuticals market,” Bryant Riley, chairman and co-CEO of B. Riley Financial, said. “Our participation in this transaction reflects our continued advocacy of our clients and ability to utilize our balance sheet to enable their success. We remain committed to support our clients amid a challenging period for credit markets and throughout the next stages of their growth.”
“B. Riley has been a consistent and reliable partner to Harrow as we have executed our growth strategy, creating significant value for our shareholders and more fully meeting the needs of our customers,” Baum said. “We are grateful to Bryant Riley personally, and the entire B. Riley team, for their leadership and support throughout the process of this transaction.”
