Impath Inc. closed a $50 million senior secured credit facility earlier this month, signing a much larger deal than its previous facility partly to entice more investor interest in the company. The deal consists of a five-year commitment for a $25 million revolving credit line and a $25 million, 364-day facility. It replaces the company's $15 million unsecured deal. "It's very important for investors to know we can tap a larger credit," said Dave Cammarata, cfo. "It's always been our intention to increase our line, but two years ago we wouldn't have met our financial covenants." New York-based Impath provides cancer information and analyses with a database of 730,000 cases. The company uses technologies to provide patient-specific cancer diagnostic and prognostic information. Cammarata explained that the company needed to grow its EBITDA to be eligible for a larger line. The company's EBITDA this year is $46 million, compared to $31 million the year before, and $19 million two years ago.
Cammarata attributes much of the growth to a physicians services division of the company's operations. "That's 90 percent of our business," he said.
FleetBoston Financial leads the five-year deal, which breaks down into a $25 million revolver and a $25 million, 364-day facility. Bank of New York and Key Corp. have signed on as co-leads. Fleet led the former deal and went out to bid for co-leads. Pricing is LIBOR plus 11/4 %. "This is a very attractive borrowing rate. We can raise equity capital at a future date," said Cammarata. He said the company is not looking at any particular acquisition with the new financing. "The opportunity for an acquisition is not the issue. We see this as an opportunity to issue stock and tap a higher line of credit," he said. He says the company would eventually like to increase the deal to $70 million.