Solta Medical's ($SLTM) master plan to reorganize and revamp continues with the finalization of $40 million in new structured debt financing. The California maker of liposuction, skin resurfacing and other aesthetic medical devices said it plans to use the money to advance its ongoing recovery strategy.
"New sales leadership in North America and Europe, combined with significant changes in our sales and marketing approach, are already generating positive results," Mark Sieczkarek, Solta's interim CEO, said in a statement. "With the additional support of this financing, we are now in a stronger position to pursue and execute on our growth plan."
Solta had reported barely $7.7 million in cash on hand as of Sept. 30, and is pursuing layoffs, a revamped sales strategy and spending reductions to return to robust revenue growth. Executives are also exploring a possible sale, disclosing recently that they hired Piper Jaffray to help evaluate strategic alternatives that would cover a sale or merger, or potential partnerships.
Asethetic medical devices remain big business, but Solta has suffered in the face of competition. As Reuters reported, the company has had to reduce the price of its signature Liposonix noninvasive fat-reduction device in the face of fierce market competition from Zeltiq Aesthestics and its CoolSculping system--a product that is more targeted.
Solta generated $33.5 million in revenue during its 2013 third quarter, versus $35 million in revenue over the same period in 2012. Losses are down, but Solta has also been hit by one-time charges relating to an acquisition and severance-related expenses as it reorganizes.
Capital Royalty Partners is behind Solta's new financing. Plans call for using $27 million out of the total $40 million to pay off an existing loan with Silicon Valley Bank. The term debt deal is better for the company's growth plans, it said, than traditional bank debt.
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