Team, Inc. Secures New Financing to Enhance Financial Stability
Enhancing Financial Flexibility: Team, Inc.'s Latest Move
Team, Inc. (TISI), a prominent provider of specialty industrial services, recently announced a successful refinancing transaction aimed at significantly lowering its cost of capital. This strategic financial maneuver is set to strengthen the company's capital structure and offer newfound financial flexibility, paving the way for future growth and operational improvements.
Details of the Refinancing Transaction
The refinancing consists of a substantial First Lien Term Loan Facility orchestrated by HPS Investment Partners, LLC. The facility totals $175 million in funded loans, alongside a Delayed Draw Term Loan of $50 million that may be accessed under specific conditions. Notably, the loan is structured to mature in March 2030 and features an attractive interest rate tied to the Secured Overnight Financing Rate (SOFR) with an added spread of 6.0% to 7.0%. This transaction is expected to reduce Team's blended interest rate by over 100 basis points.
Debt Repayment Details
This refinancing initiative allows Team to efficiently manage and reduce its existing debt burden. The funds raised will be utilized to clear the following obligations:
- The previously held $35 million delayed draw term loan, along with $22.3 million under the equipment and real estate loans connected to its ABL credit agreement.
- A senior secured incremental term loan amounting to $46.3 million provided by Corre Partners Management, LLC.
- Additionally, $54.1 million will go towards Team's existing senior secured term loan secured by Corre.
Strengthening Financial Position
As part of this strategic initiative, Team, Inc. is also rolling over its remaining outstanding debt under the senior secured term loan into a new $97.4 million Second Lien Term Loan, due for repayment in June 2030. Furthermore, the existing ABL credit facility offered by Eclipse Business Capital has been maintained and amended to facilitate this refinancing uproar.
CEO Statement
Keith D. Tucker, the Chief Executive Officer of Team, expressed optimism regarding the refinancing implications on the company’s future, stating, "The tangible improvements in TEAM's operating performance and cash flow generation over the past two years were critical in ensuring the successful execution of this refinancing. It lowers our capital expenses and enhances our financial flexibility by extending the term loans to 2030. This positions us well to work on enhancing our topline growth, reducing costs, and ultimately improving cash flow, thereby creating lasting value for our shareholders."
About Team, Inc.
Based in Sugar Land, Texas, Team, Inc. (TISI) serves a global clientele with its comprehensive range of specialized industrial services. The company's expertise covers conventional, specialized, and proprietary mechanical services, heat treatment, and inspection services. Through advanced technology and decades of dedicated service across more than 20 countries, Team, Inc. continues to focus on enhancing the safety, reliability, and operational efficiency of its customers’ critical assets.
For detailed information on Team, Inc.'s offerings, you can visit their official website at www.teaminc.com.
Frequently Asked Questions
What is the primary goal of Team, Inc.'s refinancing transaction?
The primary objective is to lower the company's cost of capital and improve financial flexibility, which can support future growth initiatives.
Who facilitated the First Lien Term Loan Facility for Team, Inc.?
The First Lien Term Loan Facility was provided by HPS Investment Partners, LLC.
When does the new Second Lien Term Loan mature?
The Second Lien Term Loan matures in June 2030.
What financial strategies does Team, Inc. aim to implement post-refinancing?
The company aims to focus on executing topline growth strategies, reducing its cost structure, and enhancing cash flow generation.
How many countries does Team, Inc. operate in?
Team, Inc. operates across more than 20 countries, offering specialized industrial services globally.
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