Team, Inc. Announces Refinancing Transaction

Rhea-AI Summary

Team Inc (NYSE: TISI) has successfully completed a refinancing transaction that reduces its cost of capital and extends debt maturities. The transaction includes a First Lien Term Loan Facility from HPS Investment Partners, consisting of a $175 million Term Loan and a $50 million Delayed Draw Term Loan, maturing in March 2030.

The facility bears interest at SOFR plus 6.0-7.0%, providing over 100 basis points improvement in blended interest rate. The funds were used to repay multiple existing loans, including a $35 million delayed draw term loan, $22.3 million in equipment and real estate loans, a $46.3 million senior secured incremental term loan, and $54.1 million of existing senior secured term loan.

Additionally, the company rolled over remaining debt into a new $97.4 million Second Lien Term Loan provided by Corre, maturing in June 2030. The existing ABL credit facility from Eclipse Business Capital continues with amendments to accommodate the transaction.

Positive

• Reduced cost of capital with over 100 basis points improvement in blended interest rate
• Extended debt maturities to 2030, improving financial flexibility
• Secured $50M additional funding potential through Delayed Draw Term Loan
• Management reports improved operating performance and cash flow generation

Negative

• Maintains significant debt load with $175M First Lien and $97.4M Second Lien Term Loans
• Still carries multiple layers of debt including ABL facility

Insights

Financial Analyst

Team Inc.'s refinancing transaction represents a significant improvement in its capital structure with tangible benefits to its financial health. The new package includes a $175 million First Lien Term Loan and a $50 million Delayed Draw Term Loan facility from HPS Investment Partners maturing in 2030, alongside a $97.4 million Second Lien Term Loan from Corre Partners also maturing in 2030.

The most impactful element of this transaction is the 100+% basis point reduction in the company's blended interest rate, with the new facility bearing interest at SOFR plus 6.0-7.0%. For a company with Team's debt profile, this interest rate reduction will deliver substantial annual savings in debt servicing costs, directly improving cash flow.

This refinancing consolidates and simplifies Team's previously fragmented debt structure by replacing multiple loans including a $35 million delayed draw term loan, $22.3 million in equipment and real estate loans, a $46.3 million senior secured incremental term loan, and $54.1 million of an existing senior secured term loan.

The extension of maturities to 2030 provides critical breathing room for the management team to focus on operational improvements without near-term refinancing pressure. Management's ability to secure these improved terms signals lender confidence in Team's operational trajectory, with CEO Keith Tucker specifically attributing the refinancing success to improved operating performance and cash flow generation over the past two years.

The transaction strategically positions Team with enhanced financial flexibility to execute its growth and cost-reduction initiatives while maintaining its existing ABL credit facility with Eclipse Business Capital.

Lowers Cost of Capital and Terms Out Maturities

SUGAR LAND, Texas, March 13, 2025 (GLOBE NEWSWIRE) -- Team, Inc. (NYSE: TISI) (“TEAM” or the “Company”), a global, leading provider of specialty industrial services offering clients access to a full suite of conventional, specialized, and proprietary mechanical, heat-treating, and inspection services, today announced that it has successfully closed on a refinancing transaction (the “Transaction”) that lowers the Company’s cost of capital and terms out its capital structure.

The Transaction consists of a First Lien Term Loan Facility (the “First Lien Facility”) provided by HPS Investment Partners, LLC (“HPS”) that matures in March 2030 and is comprised of a funded $175.0 million Term Loan and a $50.0 million Delayed Draw Term Loan available to the Company subject to satisfying certain conditions. The First Lien Facility bears interest at the Secured Overnight Financing Rate (SOFR) plus an interest rate spread of between 6.0% and 7.0%, delivering more than a 100 basis point improvement in the Company’s blended interest rate, and was used to repay:

• the Company’s $35 million delayed draw term loan and $22.3 million equipment and real estate loans under its ABL credit agreement
• the Company’s $46.3 million senior secured incremental term loan provided by Corre Partners Management, LLC (“Corre”)
• $54.1 million of the Company’s existing senior secured term loan provided by Corre
  

In conjunction with the Transaction, the Company also rolled over all remaining outstanding debt under the existing senior secured term loan into a new $97.4 million Second Lien Term Loan provided by Corre and maturing in June 2030. As part of the Transaction, the Company’s existing ABL credit facility provided by Eclipse Business Capital (“Eclipse”) will continue and was amended to permit the consummation of the Transaction.

“The tangible improvements in TEAM’s operating performance and cash flow generation over the past two years were key to completing this refinancing, which lowers our cost of capital and significantly improves our financial flexibility by extending our term loan maturities to 2030,” said Keith D. Tucker, TEAM’s Chief Executive Officer. “We are now better positioned to execute on our ongoing initiatives to drive topline growth, lower our cost structure and improve our cash flow, creating long-term value for our shareholders. We want to thank both Corre and Eclipse for their continued support and confidence in TEAM and we look forward to working with our new lending partners at HPS.”

Configure Partners and Kirkland & Ellis LLP advised TEAM in connection with the Transaction.

About Team, Inc.

Headquartered in Sugar Land, Texas, Team, Inc. (NYSE: TISI) is a global, leading provider of specialty industrial services offering customers access to a full suite of conventional, specialized, and proprietary mechanical, heat-treating, and inspection services. We deploy conventional to highly specialized inspection, condition assessment, maintenance, and repair services that result in greater safety, reliability, and operational efficiency for our customers most critical assets. Through locations in more than 20 countries, we unite the delivery of technological innovation with over a century of progressive, yet proven integrity and reliability management expertise to fuel a better tomorrow. For more information, please visit www.teaminc.com.

Forward Looking Statements

Certain forward-looking information contained herein is being provided in accordance with the provisions of the Private Securities Litigation Reform Act of 1995. We have made reasonable efforts to ensure that the information, assumptions, and beliefs upon which this forward-looking information is based are current, reasonable, and complete. However, such forward-looking statements involve estimates, assumptions, judgments, and uncertainties. They include but are not limited to statements regarding the Company’s financial prospects, the implementation of cost saving measures and the Company’s ability to realize the anticipated benefits of the Transaction. There are known and unknown factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking information. Although it is not possible to identify all of these factors, they include, among others, the duration and magnitude of accidents, extreme weather, natural disasters, and pandemics and related global economic effects and inflationary pressures; the Company’s liquidity and ability to obtain additional financing; the Company’s ability to execute on its cost management actions; the impact of new or changes to existing governmental laws and regulations and their application, including tariffs; the outcome of tax examinations, changes in tax laws, and other tax matters; foreign currency exchange rate and interest rate fluctuations; the Company’s ability to successfully divest assets on terms that are favorable to the Company; the Company’s ability to repay, refinance or restructure its debt and the debt of certain of its subsidiaries; anticipated or expected purchases or sales of assets; the Company’s continued listing on the New York Stock Exchange; and such known factors as are detailed in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the Securities and Exchange Commission, and in other reports filed by the Company with the Securities and Exchange Commission from time to time. Accordingly, there can be no assurance that the forward-looking information contained herein, including statements regarding the Company’s financial prospects and the implementation of cost saving measures, will occur or that objectives will be achieved. We assume no obligation to publicly update or revise any forward-looking statements made today or any other forward-looking statements made by the Company, whether as a result of new information, future events or otherwise, except as may be required by law.

Contact:
Nelson M. Haight
Executive Vice President, Chief Financial Officer
(281) 388-5521

FAQ

What are the key terms of Team Inc's (TISI) new First Lien Term Loan Facility?

The facility includes a $175M Term Loan and $50M Delayed Draw Term Loan, maturing March 2030, with interest at SOFR plus 6.0-7.0%.

How much will TISI save on interest rates through this refinancing?

The refinancing delivers over 100 basis points (1%) improvement in Team Inc's blended interest rate.

What existing debt did Team Inc (TISI) repay with the new financing?

TISI repaid $35M delayed draw term loan, $22.3M equipment/real estate loans, $46.3M senior secured incremental term loan, and $54.1M of existing senior secured term loan.

What is the size and maturity of TISI's new Second Lien Term Loan?

The new Second Lien Term Loan is $97.4 million and matures in June 2030.