Carlsbad, Calif.-based Alphatec said today that Globus paid $80 million in cash for its international operations and distribution channel, and inked a 5-year senior secured credit facility for up to $30 million. Alphatec also inked a supply agreement which will position it to supply its products to Globus for up to 5 years.
Alphatec said it expects to use portions of the cash offering to pay down its approximately $66 million of its existing debt and debt-related expenses.
“Today marks the beginning of a new chapter for Alphatec. I am excited about the long-term prospects for the company as we pursue the U.S. spinal market with the resources we need to support continued investment in the commercialization of our robust product line. We have the right products, an exceptional team and a newly streamlined balance sheet to support our growth across the country, and we look forward to executing on our vision, ” Alphatec Spine CEO Jim Corbett said in a press release.
With the closing of the sale, Alphatec said it drew down $25 million of its $30 million credit facility from Globus, paid off its existing Deerfield credit facility balance and retired it and reduced its MidCap Financial term loan to $5 million and revolver commitment to $22.5 million.
“As a result of this transaction, we are able to improve Alphatec’s forward-looking balance sheet by reducing our overall debt while providing the liquidity and reserves needed to invest in commercializing our robust product portfolio. The new term loan from Globus, in conjunction with a planned revolving line of credit from MidCap Financial, provides the company with credit facilities of up to $57.5 million, which will offer sufficient liquidity and appropriate financing to successfully support Alphatec’s transition to a U.S. market based company. Upon closing, we estimate our total debt drawn will be approximately $45 million. I would like to thank Deerfield who has been an excellent partner and we appreciate the support that they have provided to the company through the years. I am also pleased that MidCap will remain as a lender and provide funding for the company going forward. I want to thank them for their continued commitment and support to Alphatec,” Alphatec CFO Mike O’Neill said in prepared remarks.
The company said in late August it pulled the trigger on a 1-for-12 reverse stock split, exchanging a sinlge share of its common stock for every 12 shares held. The split went into effect August 25, according to a press release.
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