Nautilus Inc. announced the closing of a new five-year $70 million senior secured credit facility, consisting of a $55 million asset-based revolver and a $15 million term loan with Wells Fargo Bank, NA.
Nautilus will use the proceeds from the credit facility to refinance the existing $40 million asset-based facilities, pay transaction expenses and for general corporate purposes.
Jim Barr, CEO, stated “Our new credit facility provides us with additional financial flexibility to capitalize on the strength of our brand portfolio and position us for sustainable profitable growth as a global technology-driven fitness company. Investing in our strategic initiatives, digital platform, connected fitness products, go-to-market capabilities, and other market opportunities, will enable us to deliver new and exciting solutions for our customers wherever they are in their fitness journey.”
“We are very pleased to have partnered with Wells Fargo which is known for its vast experience in the consumer and retail sectors. Securing this financing package strengthens our balance sheet and provides increased liquidity and greater financial flexibility. This will allow us to strategically allocate capital to facilitate the execution of our long-term growth strategies as we continue to stabilize our business and return it to profitable growth,” said Aina Konold, chief financial officer.
The $70 million credit facility does not contain any financial performance covenants for the first two years of the facility except for a minimum liquidity covenant of $7.5 million. Beginning February 1, 2022, the minimum liquidity covenant will decrease to $5 million and only a minimum EBITDA covenant will apply. Interest on the asset-based revolver will accrue at LIBOR plus a margin of 1.75 percent – 2.25 percent (based on average quarterly availability) and interest on the term loan will accrue at LIBOR plus 5.00 percent. The credit facility will have a five-year term maturing on January 31, 2025, and the term loan will contain amortization as scheduled in the credit agreement.
OceanArc Capital Partners LLC acted as the company’s financial advisor for the transaction.
Photo courtesy Nautilus