Team, Inc. Successfully Completes Strategic Refinancing Move
Team, Inc. Successfully Completes Strategic Refinancing Move
Team, Inc. (NYSE: TISI) has made significant strides towards enhancing its financial health by successfully finalizing a key refinancing initiative. This strategic financial decision not only reduces the company's cost of capital but also streamlines its capital structure, paving the way for improved operational flexibility.
Details of the Refinancing Transaction
The refinancing encompasses a First Lien Term Loan Facility organized by HPS Investment Partners, LLC. This facility, worth $175 million, matures in March 2030 and includes a Delayed Draw Term Loan of $50 million, available under specified conditions. The interest on the First Lien Facility is structured at the Secured Overnight Financing Rate (SOFR), with a spread of 6% to 7%. This arrangement yields a notable improvement of over 100 basis points in Team, Inc.'s overall interest rates.
Impact on Previous Debts
With this refinancing, Team, Inc. has managed to pay off various outstanding obligations. These include a $35 million delayed draw term loan and $22.3 million in equipment loans under its asset-based lending credit agreement. Additionally, the company repaid a $46.3 million senior secured incremental term loan provided by Corre Partners Management, LLC, and $54.1 million from the existing senior secured term loan facilitated by Corre.
New Funding Structure and Flexibility
As part of this initiative, all remaining debt from the existing senior secured term loan has been consolidated into a new $97.4 million Second Lien Term Loan, again provided by Corre, which is set to mature in June 2030. The current ABL credit facility, managed by Eclipse Business Capital, remains active and was modified to accommodate this new refinancing deal.
Leadership Insights on the Move
Keith D. Tucker, the Chief Executive Officer of Team, Inc., expressed optimism about this refinancing move. He highlighted that the improvements in the company’s operational performance and cash generation over the preceding years were pivotal in achieving this refinancing milestone. He noted, “The enhancements in Team’s operational performance significantly bolster our cost structure and cash flow, thus leading to substantial long-term value for shareholders.” Tucker also extended gratitude to both Corre and Eclipse for their steadfast support throughout this process.
About Team, Inc.
Headquartered in Texas, Team, Inc. is a premier global provider of specialized industrial services. The company offers an extensive range of conventional and specialized mechanical, heat-treating, and inspection services. With operations in over 20 countries, Team, Inc. melds advanced technological innovation with a century of experience to ensure the safety and reliability of its clients' most critical assets.
Frequently Asked Questions
What is the primary purpose of the refinancing transaction by Team, Inc.?
The refinancing aims to lower the cost of capital and improve the company's financial flexibility, enabling better execution of growth initiatives.
Who are the financial partners involved in this transaction?
The main financial partner for the First Lien Term Loan Facility is HPS Investment Partners, LLC, along with Corre Partners Management, LLC, and Eclipse Business Capital.
What benefits does this refinancing provide Team, Inc.?
This refinancing reduces interest rates significantly and restructures outstanding debts, providing Team, Inc. with improved liquidity and financial health.
How does this refinancing affect Team, Inc.’s future investments?
The refinanced structure offers greater flexibility, allowing Team, Inc. to strategically invest in growth areas and enhance shareholder value.
Where can I find more information about Team, Inc.?
For further details, you can visit Team, Inc.'s official website.
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