Actions aimed at reducing cost of capital and
providing financing flexibility
Collateral structure
excludes planned second aerogel manufacturing facility (Plant II)
in Statesboro,
Georgia
Proceeds used to cash redeem existing
convertible note and support supplemental Plant II debt
financing
NORTHBOROUGH, Mass., Aug. 19,
2024 /PRNewswire/ -- Aspen Aerogels, Inc. (NYSE:
ASPN) ("Aspen" or the "Company"),
a technology leader in sustainability and electrification
solutions, today announced that it has closed on a $125 million term loan facility and $100 million capacity asset-based revolving
credit facility with MidCap Financial, a leading commercial finance
company managed by Apollo Capital Management, L.P., focused on
middle market transactions. The collateral structure of this
agreement excludes the assets of Aspen's wholly-owned subsidiary, Aspen
Aerogels Georgia LLC, including the Company's planned second
aerogel manufacturing facility in Statesboro, Georgia. The proceeds from this
transaction will be utilized for the full cash redemption of the
Company's legacy convertible note and for general corporate
purposes. The term loan has a maturity date of August 19, 2029.
"MidCap Financial is an outstanding partner for us as we
continue to build a highly valuable and profitable business by
leveraging our Aerogel Technology Platform into high-growth
markets," noted Donald R. Young,
Aspen's President and CEO. "This
transaction was made possible by Aspen's dedicated focus on generating
near-term profitability."
Ricardo C. Rodriguez, Chief
Financial Officer and Treasurer added, "The combined $225 million debt facilities put us on a path to
further reduce our cost of capital, while giving us access to
additional liquidity to support profitable revenue growth. The
collateral structure of the agreement is also specifically
optimized to fit into the anticipated structure of our previously
disclosed potential debt option for accelerating the longer-term
construction of our second aerogel manufacturing facility in
Statesboro, Georgia. Thinking
longer-term, eliminating the potential overhang of the existing
convertible piece of debt near or above the conversion share price
of approximately $29.94 is an added
benefit that can enable value creation."
Conference Call and Webcast Notification
A conference
call with Aspen management to
discuss this transaction will be held on Tuesday, August 20, 2024 at 8:30 a.m. ET. During the call, management will
respond to questions concerning, but not limited to, Aspen's financial performance, business
conditions, and financial outlook. Management's discussion and
responses could contain information that has not been previously
disclosed.
Shareholders and other interested parties may call +1 (833)
470-1428 (domestic) or +1 (929) 526-1599 (international) and
reference conference ID "269224" to participate in the conference
call. In addition, the conference call and an accompanying slide
presentation will be available live as a listen-only webcast hosted
at the Investors section of Aspen's website, www.aerogel.com.
Following the live event, an archived version of the webcast
will be available on Aspen's
website for convenient on-demand replay for at least a year. A copy
of this press release is posted in the Investors section on
Aspen's website.
About Aspen Aerogels, Inc.
Aspen is a technology leader in sustainability
and electrification solutions. The Company's aerogel technology
enables its customers and partners to achieve their own objectives
around the global megatrends of resource efficiency, e-mobility,
and clean energy. Aspen's
PyroThin® products enable solutions to thermal runaway challenges
within the electric vehicle ("EV") market. Aspen Battery Materials,
the Company's carbon aerogel initiative, seeks to increase the
performance of lithium-ion battery cells to enable EV manufacturers
to extend the driving range and reduce the cost of EVs. The
Company's Cryogel® and Pyrogel® products are valued by the world's
largest energy infrastructure companies. Aspen's strategy is to partner with
world-class industry leaders to leverage its Aerogel Technology
Platform® into additional high-value markets. Aspen is headquartered in Northborough, Mass. For more information,
please visit www.aerogel.com.
About MidCap Financial
MidCap Financial is a
middle-market focused, specialty finance firm that provides senior
debt solutions to companies across all industries. As of
June 30, 2024, MidCap Financial
provides administrative or other services for over $51 billion of commitments*. MidCap Financial is
managed by Apollo Capital Management, L.P., a subsidiary of Apollo
Global Management, Inc, pursuant to an investment management
agreement. Apollo had assets under management of approximately
$696 billion as of June 30, 2024, in credit, private equity and real
assets funds.
For more information about MidCap Financial, please visit
http://www.midcapfinancial.com.
For more information about Apollo, please visit
http://www.apollo.com.
*Including commitments managed by MidCap Financial Services
Capital Management LLC, a registered investment adviser, as
reported under Item 5.F on Part 1 of its Form ADV.
Special Note Regarding Forward-Looking and Cautionary
Statements
This press release and any related discussion
contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 that involve risks
and uncertainties that could cause actual results to be materially
different from historical results or from any future results
expressed or implied by such forward-looking statements. These
statements are not historical facts but rather are based on
Aspen's current expectations,
estimates and projections regarding Aspen's business, operations and other factors
relating thereto. Words such as "may," "will," "could," "would,"
"should," "anticipate," "predict," "potential," "continue,"
"expects," "intends," "plans," "projects," "believes," "estimates,"
"outlook," "assumes," "targets," "opportunity," and similar
expressions are used to identify these forward-looking statements.
Such forward-looking statements include statements regarding, among
other things, Aspen's beliefs and
expectations about the EV market and how it may enable a path to
profitability; Aspen's
expectations with respect to the construction of the planned second
manufacturing plant in Georgia
("Plant II"); and Aspen's
expectations and beliefs regarding the use of proceeds from the
MidCap Financial facility, the flexibility and efficiency of the
facility, the future cost of capital and availability of liquidity,
and potential future sources of capital. All such forward-looking
statements are based on management's present expectations and are
subject to certain factors, risks and uncertainties that may cause
actual results, outcome of events, timing and performance to differ
materially from those expressed or implied by such statements.
These risks and uncertainties include, but are not limited to, the
following: inability to execute Aspen's growth plan, inability to continue
construction of Plant II and to do so at a cost consistent with
Aspen's estimates and aligned with
Aspen's expectations of demand
from our EV customers; the right of EV thermal barrier customers to
cancel contracts with Aspen at any
time and without penalty; any costs, expenses, or investments
incurred by Aspen in excess of
projections used to develop pricing under the contracts with EV
thermal barrier customers; Aspen's
inability to create customer or market opportunities for its
products; any disruption or inability to achieve expected capacity
levels in any of its manufacturing or assembly facilities; any
failure to enforce any of Aspen's
patents; the general economic conditions and cyclical demands in
the markets that Aspen serves; and
the other risk factors discussed under the heading "Risk Factors"
in Aspen's Annual Report on Form
10-K for the year ended December 31,
2023 and filed with the Securities and Exchange Commission
("SEC") on March 7, 2024, as well as
any updates to those risk factors filed from time to time in
Aspen's subsequent periodic and
current reports filed with the SEC. All statements contained in
this press release are made only as of the date of this press
release. Aspen does not intend to
update this information unless required by law.
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SOURCE Aspen Aerogels, Inc.