Irvine-based stent graft maker Endologix Inc. filed for Chapter 11 bankruptcy on July 5, noting business interruptions due to COVID-19 as partially responsible for the move.
Shares for the company (Nasdaq: ELGX) fell nearly 66% to 26 cents at midday trading and a $5 million market cap. The company, which in 2014 traded as high as $179, has fallen in recent years on a sales slump and annual losses.
The company said its largest creditor, San Francisco-based real estate investment firm Deerfield Partners, will take it private. The transaction is scheduled to be completed by the end of the third quarter when the company said it will emerge “well capitalized” and well positioned for long-term growth.
Under the terms of the deal, Endologix will get rid of $180 million in debt, including $130 million in debt held by Deerfield that will be converted into equity. In addition, Endologix will gain $110.8 million in financing including $30 million in exit financing and $50 million in rolled-over debt.
“The path we are now taking to strengthen our balance sheet and transition to private ownership will allow us to accelerate our progress with our strong patient-first business focus, an enduring spirit of innovation, and an unrelenting commitment to advancing our life-saving products supported by industry-leading evidence,” Chief Executive John Onopchenko said in a statement.
