Landec receives $170M unitranche loan as part of refinancing

Landec Corp. received $245 million in new credit facilities to refinance debt.

The new facilities included a $170 million, five-year L+850 unitranche term loan, of which $150 million was funded at close, the company said in a Jan. 4 statement. The remaining $20 million is a multi-draw, delayed-draw term loan, accessible for two years. The borrower will pay interest only for the first two years. The loan is governed by leverage covenants.

Goldman Sachs Specialty Lending Group is the agent on the unitranche. The debt financing was split equally between Goldman Sachs and Guggenheim Credit Services.
The financing package also included a $75 million asset-based line of credit, subject to a borrowing base. The line of credit has a five-year term and is subject to a springing maturity. Interest opens at L+225. Of the facility, $36 million was funded at closing. BMO Harris Bank is the lender.

While annual interest costs will increase by roughly $6 million, annual principal payments will decline by approximately $12 million through the new facilities, giving the borrower about $6 million net in increased cash flow for the first two years. Landec will book a $1.2 million charge in the third quarter of fiscal 2021 for the transaction.
Armory Securities LLC was the company’s financial adviser on the refinancing transaction.

Landec Corp. is a diversified health and wellness company with two operating businesses: Curation Foods Inc. and Lifecore Biomedical Inc.