Societal CDMO signs for sale and leaseback, enters $37.5 million facility

Chicago, Dec. 12 – Societal CDMO Inc. announced a series of transactions aimed at recasting its capital structure and strengthening its balance sheet on Monday in a press release.

The company is selling its Gainesville, Ga. manufacturing site and campus to Tenet Equity to yield $39 million in a sale and leaseback transaction.

Proceeds from the sale will be used to reduce the company’s outstanding debt with Athyrium Capital Management, LP.

Tenet has also provided a forward funding commitment of up to an additional $35 million for future renovations or expansions, subject to customary approvals.

The company is also selling 121 acres of unused lakefront land adjacent to the manufacturing facility for an additional $9 million in non-dilutive capital upon closing.

Second, the company signed for a new $37.5 million term A loan facility with Royal Bank of Canada.

The loan is linked to a $32.5 million equity raise, whereby any amount from the sale of equity in excess of the $32.5 million will reduce the term A loan on a dollar-to-dollar basis.

The three-year term loan bears interest at SOFR plus 450 basis points.

Proceeds will also be used to reduce the outstanding debt balance with Athyrium, which carries a 13% combined interest rate and matures Dec. 31, 2023.

When the Royal Bank of Canada facility funds, the entire Athyrium facility will be repaid.

Societal CDMO is an Exton, Pa.-based contract development and manufacturing organization for the biotechnology sector. The company was previously named Recro Pharma, Inc.

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