Endologix Inc. in Irvine agreed on a debt package of $170 million with New York private equity firm Deerfield Management Co., which now also holds rights to buy 6.5 million Endologix shares at $9.23 apiece.
Endologix makes endovascular stent grafts to treat abdominal aortic aneurysms—a condition that can lead to tears or leakage in blood vessel walls.
It recently traded at $6.75 per share for a $566 million market cap.
The new debt comes in two parts. Endologix borrowed $120 million on a seven-year term in the form of senior secured notes, and it opened a $50 million revolving credit facility, the two companies said.
The loan’s interest rate is 6.87%; the credit facility’s rate is London Interbank Offered Rate (LIBOR) + 4.6%.
Endologix will use proceeds of the term loan—$113 million after expenses—to repay about $53 million in convertible debt and for working capital, which includes development and marketing of product lines and of software, the companies said.
Endologix hasn’t drawn any funds on the $50 million credit facility.
The company reported a 2016 net loss of about $155 million on revenue of $193 million, compared with a net loss of about $50 million on revenue of about $154 million in 2015.
