MiMedx Group, Inc. (OTC PINK: MDXG) (“MiMedx” or “the Company”), an
industry leader in advanced wound care and an emerging therapeutic
biologics company, today announced the closing of concurrent $150
million private equity and debt financings, consisting of an equity
financing pursuant to a Securities Purchase Agreement with an
entity controlled by EW Healthcare Partners and certain funds
managed by Hayfin Capital Management LLP (“Hayfin”), and a debt
financing pursuant to a Loan Agreement with Hayfin. As part of the
transaction, EW Healthcare Partners has designated Martin P. Sutter
and William A. Hawkins III to serve on the Company’s board as
preferred directors.
Timothy R. Wright, MiMedx Chief Executive
Officer, commented, “Obtaining this critical financing is a clear
turning point for the Company. The additional resources provide us
with the ability to strengthen areas critical to stabilizing the
business, prioritize investments that enhance our Research &
Development, Manufacturing, and Commercial organizations, and
pursue the attractive growth opportunities afforded by the
Company's amniotic tissue products and know-how. Moreover, the
affirmation of the strength of our new leadership team and future
prospects from one of the nation’s top healthcare-specific
investors is a meaningful endorsement of the Company’s progress and
efforts to return to the patient-centered mission of innovation
that helps people heal.”
M. Kathleen Behrens, Ph.D., Chair of the MiMedx
Board of Directors, added, “This transaction marks the culmination
of an extensive review of potential financing alternatives by the
Board, in consultation with the Company’s advisors, which included
a leading investment bank with in-depth, industry-specific
expertise. A new leadership team, new board members, and now the
opportunity to welcome these accomplished and well-regarded leaders
to our Board of Directors, each demonstrate great progress toward
transforming and positioning the Company for the future.”
Martin P. Sutter, Co-Founder and a Managing
Director of EW Healthcare Partners, said: “EW Healthcare Partners
is delighted to become a significant shareholder in MiMedx. We are
very impressed with the entire senior management team and Board of
Directors, and the tremendous work they are doing to transform the
Company. We are aligned with the Company’s vision and look forward
to assisting the team in regaining its leadership position in the
attractive and growing advanced wound care space.”
William A. Hawkins III, Senior Advisor to EW
Healthcare Partners, added, “The new management team and board
members have made great progress in transforming the enterprise and
positioning the Company for continued success. MiMedx has long been
a leader in bringing forth innovative solutions for the advanced
wound care market, and I look forward to partnering with Tim Wright
and the entire management team to support the Company’s growth and
strategic priorities to improve patient care.”
Equity Investment
Under the Securities Purchase Agreement, the
Company is issuing shares of a newly created Series B Convertible
Preferred Stock for an aggregate purchase price of $100,000,000
(the “Equity Investment”), with $90,000,000 being made by an entity
controlled by EW Healthcare Partners and $10,000,000 being made by
Hayfin. The Series B Convertible Preferred Stock, together with any
accrued and unpaid dividends thereon, may be converted into Company
common stock at any time at a conversion price of $3.85 per share
of Company common stock. The Series B Convertible Preferred Stock
carries a cumulative annual dividend of 4% for the first 12 months
following the closing and 6% thereafter.
Debt Financing
Under the Loan Agreement, Hayfin is providing
MiMedx with a five-year term loan facility (the “Term Loan
Facility”) in the aggregate principal amount of $50 million, the
full amount of which is being borrowed and funded, and a one-year,
delayed draw term loan facility in the aggregate principal amount
of $25 million, which is not currently being drawn or funded. The
Facilities bear interest at a rate equal to LIBOR (subject to a
floor of 1.5%) plus a margin of 6.75%. The margin will be eligible
to decrease to 6.5% or 6.0% after December 31, 2020, based on
future total net leverage levels.
The Loan Agreement does not include any equity
or equity-linked component.
Use of Proceeds
The aggregate proceeds of the Equity Investment
and the Term Loan Facility have been or will be used (i) to repay
the outstanding principal, interest, and prepayment premium
resulting from the early termination of the Company’s Term Loan
Agreement with Blue Torch Finance LLC, (ii) for working capital and
general corporate purposes, and (iii) to pay transaction fees,
costs and expenses incurred in connection with the Equity
Investment, the Term Loan Facility and the related
transactions.
Background of the
Transactions
As will be more fully described within Item 7 of
the Company’s 2019 Annual Report on Form 10-K, during the last two
years the Company has experienced a decline in sales and
significant non-business expenses, and expects to continue to incur
such expenses over the near term and mid-term. In addition, as
previously disclosed, the Company required additional capital to
implement its strategic plan, including for enhancements to its
manufacturing plant to meet current Good Manufacturing Practice
(cGMP) requirements, for clinical trials to support Investigational
New Drug (IND) and Biologics License Applications (BLAs), to
mitigate other risks, and to address ongoing spend for legal
matters (including under contractual indemnification requirements
for former officers).
The Company held discussions with more than 20
potential financing sources, and after thoroughly evaluating
multiple proposals received and carefully considering various
financing alternatives, the Board unanimously approved the Equity
Investment and the Term Loan Facility.
Additional Information
Further details regarding the Securities
Purchase Agreement, the Loan Agreement and the termination of the
Blue Torch Term Loan Agreement will be contained in MiMedx’s Annual
Report on Form 10-K for the year ended December 31, 2019 or a
Current Report on Form 8-K that the Company will be filing with the
Securities and Exchange Commission (the “SEC”). This filing will be
available on the SEC’s website at www.sec.gov and in the Investors
section of the Company’s corporate website at www.mimedx.com.
J.P. Morgan is acting as sole placement agent
and Sidley Austin LLP is serving as legal counsel to the
Company.
About EW Healthcare Partners
With close to $4 billion raised since inception, EW Healthcare
Partners is one of the largest and oldest private healthcare
investment firms and seeks to make growth equity investments in
fast growing commercial-stage healthcare companies in the
pharmaceutical, medical device, diagnostics, and technology-enabled
services sectors in the United States and in Europe. Since its
founding in 1985, EW Healthcare Partners has maintained its
singular commitment to the healthcare industry and has been a
long-term investor in over 150 healthcare companies, ranging across
sectors, stages and geographies. The team is comprised of over 20
senior investment professionals with offices in Palo Alto, Houston,
New York, and London. For more information, visit
www.ewhealthcare.com.
About William A. Hawkins,
IIIMr. Hawkins is the retired Chairman and Chief Executive
Officer of Medtronic, Inc. and has had a long and distinguished
career in the medical devices industry. Mr. Hawkins is a Senior
Advisor to EW Healthcare Partners and currently serves on several
public, private and non-profit boards. He is a director of Biogen,
Inc. (NASDAQ: BIIB); Avanos Medical, Inc. (NYSE: AVNS); Virtue
Labs; Baebies, Inc.; AskBio; Immucor, Inc. Cereius, Inc.; and
Cirtec Medical. He is also Chairman of the Board of Bioventus, LLC
and 4Tech, a cardiology startup in Ireland. Mr. Hawkins is the
former Chairman and Co-Founder of the Medical Device Innovation
Consortium and a past-president of the American Institute of
Medical and Biological Engineering (“AIMBE”). He was recently
elected to the National Academy of Engineering and is an AIMBE
Fellow. Mr. Hawkins was elected to the Duke University Board of
Trustees in 2011 and currently serves as Vice Chairman of the
Board. Mr. Hawkins is also Chair of the Board of the Duke
University Health System. He is a member of the NC Biotech board
and serves on the Board of the Focused Ultrasound Foundation
Society. Mr. Hawkins has a dual B.S.E.E. degree in Electrical and
Biomedical Engineering from Duke University and an MBA from the
Darden School of Business, University of Virginia.
About Martin P. SutterMartin P.
Sutter is the Co-Founder and a Managing Director of EW Healthcare
Partners, previously known as Essex Woodlands Health Ventures. Mr.
Sutter has been directly involved with more than 30 EW Healthcare
Partners’ portfolio company investments and has served on numerous
past Boards of Directors of public and private companies, including
ATS Medical, which was acquired by Medtronic, Inc., BioForm
Medical, which was acquired by Merz GmbH & Co KGaA, LifeCell,
which was acquired by Kinetic Concepts, Inc., St. Francis Medical,
which was acquired by Kyphon, Inc./Medtronic, Inc., Confluent
Surgical, which was acquired by Tyco International/Covidien and
Rinat Neurosciences, which was acquired by Pfizer, Inc. Mr. Sutter
currently serves on the Boards of Directors of Abiomed, Inc.
(NASDAQ: ABMD), Bioventus LLC, and Prolacta Bioscience. Mr. Sutter
is a former Trustee of The Culinary Institute of America. Mr.
Sutter holds a Bachelor of Science degree from Louisiana State
University and a Master of Business Administration degree from the
University of Houston.
About Hayfin Capital Management
LLCHayfin Capital Management (“Hayfin”) is a leading
European alternative asset management firm with approximately €15
billion of assets under management. Since it was founded in 2009,
Hayfin has invested c.€20 billion of capital across more than 340
portfolio companies. Hayfin focuses on delivering best-in-class
risk-adjusted returns for its investors across five strategies:
Direct Lending, Special Opportunities, High-Yield Credit,
Structured Products and Private Equity Funds. Hayfin has a diverse
international team of over 135 experienced industry professionals
with offices globally, including headquarters in London and offices
in Frankfurt, Luxembourg, Madrid, Milan, New York, Paris, and Tel
Aviv. Hayfin is authorized and regulated by the Financial Conduct
Authority. Further information can be found at www.hayfin.com.
About MiMedx
MiMedx® is an industry leader in advanced wound
care and an emerging therapeutic biologics company developing and
distributing human placental tissue allografts with
patent-protected processes for multiple sectors of healthcare. The
Company processes the human placental tissue utilizing its
proprietary PURION® process methodology, among other processes, to
produce allografts by employing aseptic processing techniques in
addition to terminal sterilization. MiMedx has supplied over 1.9
million allografts to date. For additional information, please
visit www.mimedx.com.
Forward-Looking Statements
This press release contains forward-looking
statements. All statements relating to events or results that may
occur in the future are forward-looking statements, including,
without limitation, statements regarding anticipated future
expenses and use of proceeds from the Equity Investment and the
Term Loan Facility. Forward-looking statements generally can be
identified by words such as “expect,” “will,” “intend,” “seek,”
“target,” “future,” “plan,” “continue,” “potential,” “possible,”
“could,” “would,” “may,” “anticipate,” “to be” and similar
expressions. These statements are based on numerous assumptions and
involve known and unknown risks, uncertainties and other factors
that could significantly affect the Company’s operations and may
cause the Company’s actual actions, results, financial condition,
performance or achievements to differ materially from any future
actions, results, financial condition, performance or achievements
expressed or implied by any such forward-looking statements.
Factors that may cause such a difference include, without
limitation, those discussed under the heading “Risk Factors” in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2018 and the Company’s Annual Report on Form 10-K for the year
ended December 31, 2019.
Unless required by law, the Company does not
intend, and undertakes no obligation, to update or publicly release
any revision to any forward-looking statements, whether as a result
of the receipt of new information, the occurrence of subsequent
events, a change in circumstances or otherwise. Each
forward-looking statement contained in this release is specifically
qualified in its entirety by the aforementioned factors. Readers
are advised to carefully read this release in conjunction with the
important disclaimers set forth above prior to reaching any
conclusions or making any investment decisions and not to place
undue reliance on forward-looking statements, which apply only as
of the date of this release.
Contact:
Hilary DixonInvestor Relations & Corporate
Communications770.651.9066investorrelations@mimedx.com
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