Artivion Obtains $350 Million in Senior Secured Credit Facilities
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Insights
Artivion's new credit agreement with Ares Management Credit funds is a strategic financial maneuver that aims to strengthen the company's balance sheet by addressing upcoming debt maturities without diluting shareholder equity. The structure of the deal, which includes a mix of term loans and revolving credit facilities, provides liquidity and financial flexibility. This is crucial for Artivion as it secures the necessary capital to retire existing debts while preserving the option to manage future obligations linked to convertible bonds.
The credit facilities' interest-only feature with 6-year maturities suggests a favorable lending environment and reflects the lenders' confidence in Artivion's financial health and growth prospects. The flexibility to draw additional funds to refinance convertible bonds could mitigate the risk of cash flow disruptions and enable the company to navigate the capital markets more efficiently. For investors, this could signal a proactive approach to debt management and potentially reduce the risk of financial distress, which is often a concern for companies facing significant debt obligations.
Artivion's strategic positioning within the cardiac and vascular surgery market, particularly focusing on aortic disease, is likely to benefit from the enhanced financial stability provided by the new credit facilities. By securing non-dilutive financing, Artivion can continue to invest in R&D and capitalize on market opportunities without compromising current shareholder value through equity issuance.
The company's mention of entering a new phase of profitable growth, reinforced by recent financial performance and clinical data readouts, suggests that Artivion is on a trajectory that could attract investor interest. The ability to deliver on strategies that drive shareholder value is paramount and the financial leeway afforded by the credit agreement could support strategic initiatives such as mergers and acquisitions, market expansion, or accelerated product development. Stakeholders should monitor how effectively Artivion deploys this capital to gauge the long-term impact on the company's market position and competitive edge.
The intricacies of the credit agreement, as briefly outlined, highlight a comprehensive legal framework designed to protect both the lender and borrower's interests. The 'unfunded delayed draw term loan commitments' are a notable feature, providing Artivion with a conditional financial safety net. While this offers strategic flexibility, it also imposes certain obligations that must be met to access the additional capital. Investors should be aware of the covenants and conditions associated with such financial instruments, as they can have material implications for the company's operations and financial strategy.
Furthermore, the details of the agreement filed with the U.S. Securities and Exchange Commission on Form 8-K will provide critical transparency and legal compliance. This document will offer stakeholders a more detailed look at the terms of the financing, including interest rates, covenants and the conditions under which Artivion can draw additional funds. A thorough review of these legal documents can reveal insights into the company's risk management strategies and its commitment to maintaining a robust capital structure.
Non-Dilutive Financing Provides Comprehensive Solution to Address Debt Maturities and Provide Flexibility to Further Optimize Capital Structure
The credit facilities include an initial
"This agreement represents a comprehensive approach to optimize our capital structure as we prepare to enter a new phase of profitable growth," said Pat Mackin, Chairman, President, and Chief Executive Officer of Artivion. "The conviction we have in our business outlook, which has been strengthened by our recent financial performance and clinical data readouts, has never been greater and we look forward to further advancing our strategies to deliver significant shareholder value."
Further details regarding the new credit agreement are included in the Company's Form 8-K filed with the
About Artivion, Inc.
Headquartered in suburban
About Ares Management Corporation
Ares Management Corporation (NYSE: ARES) is a leading global alternative investment manager offering clients complementary primary and secondary investment solutions across the credit, private equity, real estate and infrastructure asset classes. We seek to provide flexible capital to support businesses and create value for our stakeholders and within our communities. By collaborating across our investment groups, we aim to generate consistent and attractive investment returns throughout market cycles. As of September 30, 2023, Ares Management Corporation's global platform had approximately
Forward Looking Statements
Statements made in this press release that look forward in time or that express management's beliefs, expectations, or hopes are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of management at the time such statements are made. These statements include our expectations regarding the repurchase or repayment of our convertible bonds at or prior to maturity and our beliefs that our new credit agreement represents a comprehensive approach to optimize our capital structure, we are entering a new phase of profitable growth, our business outlook, particularly in light of our recent financial performance and clinical data results, has never been greater, and we can further advance our strategies to deliver significant shareholder value. These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from current expectations, including, but not limited to, that the benefits anticipated from the Ascyrus Medical LLC transaction and Endospan agreements may not be achieved at all or at the levels we had originally anticipated. These risks and uncertainties include the risk factors detailed in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2022 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023. Artivion does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise.
Contacts: | |
Artivion Lance A. Berry Executive Vice President & Chief Financial Officer Phone: 770-419-3355 | Gilmartin Group LLC Brian Johnston / Laine Morgan Phone: 332-895-3222
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SOURCE Artivion, Inc.
FAQ
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