Accuray Inc. said Tuesday it closed a $70 million straight debt financing agreement with Cerberus Business Finance LLC, an affiliate of Cerberus Capital Management LP. Proceeds will be used, along with $30 million cash funded by Accuray, to retire $100 million in debt. Accuray is a radiation oncology company.
SUNNYVALE, Calif., Jan. 12, 2016 /PRNewswire/ — Accuray Incorporated (NASDAQ: ARAY) announced today it has closed a $70 million straight debt financing agreement with Cerberus Business Finance, LLC, an affiliate of Cerberus Capital Management, L.P. The net proceeds of the loan are required to be used, in addition to $30 million of cash funded by Accuray, to retire $100 million of convertible notes at the earlier of August 2016 or when otherwise redeemed.
This financing consists of a $70 million first lien senior secured term loan with a 700 basis point margin and 1 percent LIBOR floor. The loan will be amortized at 5 percent annually with final payment due in 5 years, and is subject to certain maintenance-based covenants. Management currently expects to repay the loan’s principal with cash generated from operations.
“In today’s volatile financial markets, the ability to secure this type of capital financing with Cerberus and eliminate the potential issuance of approximately 10.6 million shares of our common stock demonstrates our progress in commercial execution and shows confidence in our long-term financial plans and stability,” said Joshua H. Levine, president and chief executive officer of Accuray. “As our preliminary second quarter results released yesterday and the reiteration of our full year 2016 guidance show, our company is building solid, sustainable momentum. The funding enables us to improve Accuray’s capital structure and increases shareholder value moving forward.”
Cowen and Company acted as financial advisor to Accuray and served as sole arranger for the transaction.
Further information on Accuray is available at www.accuray.com.
Accuray Incorporated (Nasdaq: ARAY) is a radiation oncology company that develops, manufactures and sells precise, innovative treatment solutions that set the standard of care with the aim of helping patients live longer, better lives. The company’s leading-edge technologies deliver the full range of radiation therapy and radiosurgery treatments. For more information, please visitwww.accuray.com.
Safe Harbor Statement
Statements made in this press release that are not statements of historical fact are forward-looking statements and are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release relate, but are not limited, to clinical applications, clinical results, patient outcomes, and Accuray’s leadership position in radiation oncology innovation and technologies. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including but not limited to the risks detailed under the heading “Risk Factors” in the company’s report on Form 10-K, filed on August 28, 2015, the company’s report on Form 10-Q, filed on November 5, 2015, and the company’s other filings with the SEC.
Forward-looking statements speak only as of the date the statements are made and are based on information available to the company at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. The company assumes no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not put undue reliance on any forward-looking statements.
About Cerberus Capital Management, L.P.
Established in 1992, Cerberus Capital Management, L.P. is one of the world’s leading private investment firms. Cerberus has more than US $28 billion under management invested in four primary strategies: distressed securities & assets; control and non-control private equity; commercial mid-market lending and real estate-related investments. From its headquarters in New York City and large network of affiliate and advisory offices in the U.S., Europe and Asia, Cerberus has the on-the-ground presence to invest in multiple sectors, through multiple investment strategies in countries around the world.
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