Outset Medical, Inc. (Nasdaq: OM) (“Outset”), a medical technology company pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis, today announced that it has entered into two senior secured credit facility agreements with investment affiliates managed by SLR Capital Partners, LLC (“SLR”) which collectively provide for borrowings of up to $300 million, including up to $250 million of term loan and up to $50 million revolving asset-backed credit facility.
“We are pleased to have completed this non-dilutive debt financing on favorable terms, which allows us to further strengthen our balance sheet,” said Leslie Trigg, President and CEO of Outset. “This agreement provides additional support and flexibility as we advance our mission to bring a technology-based, patient-centric approach to dialysis in both acute and home settings.”
The term loan facility includes a $200 million commitment that can be increased to $250 million and the revolving asset-based credit facility includes a $25 million commitment that can be increased to $50 million , with any increase subject to certain milestones and SLR credit approval. The maturity date of the credit facilities is November 1, 2027. The annual interest rate is equal to the one-month forward SOFR (subject to a floor of 2.75%), plus (1) 5 .15% under the term loan facility and (2) 3.20% under the asset-based revolving credit facility. The term loan facility provides for at least 48 months of interest-only payments at closing, which can be extended to 54 months subject to certain financial milestones. At closing, Outset secured $100 million in financing under the term loan facility. An additional $100 million is available to borrow under the credit facilities at closing. Along with securing these facilities with SLR, Outset withdrew its existing cash-backed credit facility from Silicon Valley Bank.
Armentum Partners served as financial advisor and Cooley LLP served as legal advisor to Outset on the transaction. Additional details regarding the foregoing financing are set forth in Outset’s current report on Form 8-K, filed today with the SEC.
About Outset Medical, Inc.
Outset is a medical technology company pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis. The Tablo hemodialysis system, cleared by the FDA for hospital-to-home use, represents a significant technological advancement that transforms the dialysis experience for patients and operationally simplifies it for providers. Tablo serves as a single enterprise solution that can be used across the continuum of care, allowing dialysis to be administered anytime, anywhere, by anyone. Integration of water purification and on-demand dialysate production enables Tablo to serve as a dialysis clinic on wheels, with two-way wireless data transmission and a proprietary data analysis platform fueling a new holistic approach to dialysis care. Tablo is a registered trademark of Outset Medical, Inc.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the availability of future borrowings under the credit facilities. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause actual results and other events to differ materially from those expressed or implied by such statements. . These risks and uncertainties include the risks described in the Risk Factors section of Outset’s most recent annual report on Form 10-K and quarterly reports on Form 10-Q filed with the United States Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof and should not be relied upon unduly. Outset disclaims any obligation to update these forward-looking statements.