TerrAscend Corp (CSE: TER) this morning announced that it has closed on a US$120 million senior secured term loan with a syndicate of lenders. The term loan was required following what is said to be strong performance exhibited by Ilera Healthcare Division, requiring the company to payout the entire earnout provision of the transaction, of which US$135 million remains.
Ilera was originally acquired by TerrAscend back in September 2019 for proceeds of up to US$225 million, a figure that is based on the full earn-out incentive structure being met. The company operates in Pennsylvania, housing a 144,000 square foot cultivation and manufacturing facility along with three dispensaries.
The term loan, arranged by Seaport Global Securities, will see the assets of Ilera secured against the debts. The loan bears interest at a rate of 12.875% per annum, with a four year maturity on the debt while being callable at any time. With an initial value of US$120 million, the company is able to expand the loan by up to US$30 million subject to certain conditions being met.
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The funds from the raise will be used in entirety to fund the earn-out payments required to be made to Ilera, with the remaining portion owed to be paid via cash on hand.
TerrAscend Corp last traded at $12.33 on the CSE.
Information for this briefing was found via Sedar and TerrAscend Corp. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
