NeoGenomics closes on revolver, term loan totaling $80 million

By Marisa Wong

Morgantown, W.Va., Dec. 31 – NeoGenomics, Inc. entered into commitment letters on Dec. 30 for a new $25 million senior secured revolving credit facility and a new $55 million senior secured term loan facility to finance its acquisition of Clarient, Inc., according to an 8-K filing with the Securities and Exchange Commission.

At closing, the company borrowed $10 million under the revolver and $55 million under the term loan.

Revolver terms

Wells Fargo Bank, NA is the administrative agent for the five-year revolver.

The revolver facility includes a $1 million letter-of-credit subfacility.

Borrowings are limited to a borrowing base comprised of 85% of the expected net value of certain billed and unbilled accounts less reserves.

The interest rate is Libor plus an applicable margin ranging from 300 basis points to 350 bps. NeoGenomics will also pay 0.25% per year on any unused portion of the revolver.

The revolver contains the following financial covenants: maintenance of a maximum total leverage ratio of not more than 4.0 to 1, stepping down over time to 3.25 to 1; maintenance of a minimum consolidated fixed charge coverage ratio of at least 1.1 to 1, stepping up over time to 1.25 to 1; and maintenance of a minimum cash velocity equal to or greater than 80%.

Term loan terms

AB Private Credit Investors LLC is the administrative agent for the five-year term loan.

Interest on the term loan is initially Libor plus 700 bps, subject to a 1% Libor floor. Interest will be reduced to Libor plus 650 bps upon the later of (a) NeoGenomics’ achieving maximum total leverage of less than 2.0 to 1 and (b) Jan. 1, 2017.

The term loan provides for annual amortization payments, 1% of the original principal amount paid in quarterly installments.

The term loan contains the following financial covenants: maintenance of a maximum total leverage ratio of 4.0 to 1, stepping down over time to 3.25 to 1, and maintenance of a minimum consolidated fixed charge coverage ratio of 1.10 to 1, stepping up over time to 1.25 to 1.

Based in Fort Myers, Fla., NeoGenomics is a cancer genetics diagnostics testing company.

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