Emergent BioSolutions Inc. (NYSE: EBS) today announced the closing of a new credit facility agreement with Oak Hill Advisors for a term loan of up to $250 million (the “New Term Loan”). Emergent used a portion of the proceeds of the New Term Loan to repay all amounts outstanding under the senior term loan facility under the Amended and Restated Credit Agreement, dated October 15, 2018, by and among Emergent, the lenders party thereto from time to time, and Wells Fargo Bank, National Association, as the Administrative Agent (as amended, the “Prior Credit Agreement”), which was scheduled to mature in May 2025. The New Term Loan maturity extends up to five years, through August 2029. Excess proceeds from the refinancing will result in additional cash to the balance sheet. Emergent also terminated its obligations under the senior term loan facility and the revolving credit facility under the Prior Credit Agreement.
“For the past 18 months, Emergent has executed on a series of actions to strengthen the balance sheet and streamline operations,” said Joe Papa, president and CEO of Emergent. “These steps, which include finalizing several asset/site divestures, resolving legacy issues, and now, securing this significant debt refinancing, are critical to stabilizing our financial profile.”
In connection with the execution of the New Term Loan, Emergent issued the lenders warrants to purchase 2.5 million shares of common stock with a strike price at a premium to the volume weighted average price per share for the 30 trading days ending on, but excluding, the 10th business day following the closing date (the “30-Day VWAP”). In addition, subject to certain limitations Emergent agreed to issue the lenders shares of common stock with an aggregate value of $10 million at a price per share equal to the 30-Day VWAP.
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