Treace Medical Concepts, Inc. (TMCI) announced a $175 million senior secured loan package that will strengthen its balance sheet and provide a non‑dilutive source of capital for future growth initiatives. The facility is structured as a $60 million term loan that was funded at closing, an additional $65 million of term‑loan availability, and a $50 million revolving credit line, all subject to customary conditions.
The proceeds from the new term loan were immediately used to retire a $50 million term loan and $4 million of the company’s existing revolving credit. This refinancing action lifted the company’s liquidity to roughly $165 million in cash, cash equivalents, and unused credit capacity, giving Treace a stronger financial cushion as it pursues platform expansion and navigates litigation costs and macroeconomic headwinds.
The loan carries an interest rate tied to the Secured Overnight Financing Rate (SOFR) plus a spread, with a 3 % floor. The term loan is priced at SOFR + 5.05 % and the revolving facility at SOFR + 4.00 %. Interest on the term loan is payable monthly for 48 months, with an optional 12‑month extension, and the entire facility has a five‑year maturity that aligns with the company’s medium‑term growth plans.
Treace’s management highlighted that the new financing is a strategic move to preserve shareholder value while avoiding equity dilution. By refinancing higher‑cost debt and increasing available credit, the company gains flexibility to invest in its platform, address potential litigation expenses, and weather broader economic uncertainty. The non‑dilutive nature of the debt is particularly important for a company that has historically relied on debt to fund growth and has faced scrutiny over its profitability trajectory.
The company’s recent financial performance shows a company in transition. Prior to this announcement, Treace had been working to improve its Adjusted EBITDA profile while managing a net loss. Revenue growth had slowed in the most recent quarter, reflecting a shift in market demand toward minimally invasive procedures and softer consumer sentiment for elective surgeries. The new debt facility provides the liquidity needed to support the company’s strategic shift toward minimally invasive solutions and to maintain momentum in a competitive bunion‑surgery market.
Management emphasized that the financing will also help the company address litigation costs that could arise from product‑related claims. By having a larger credit cushion, Treace can respond to legal contingencies without compromising its ability to fund research and development or expand its product portfolio. This proactive approach signals confidence in the company’s long‑term strategy and a commitment to protecting shareholder interests.
The $175 million facility represents a significant increase in Treace’s debt capacity compared with previous financing rounds, such as the $50 million facility in 2020 and the $20 million facility in 2019. The larger credit line positions the company to pursue new product launches and potential acquisitions without the need for additional equity issuance, thereby preserving ownership structure while supporting growth initiatives.
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