DMC Global Closes $300 Million Senior Secured Credit Facility
07 Febbraio 2024 - 1:00PM
DMC Global Inc. (Nasdaq: BOOM) today announced it has closed a $300
million, five-year senior secured credit facility consisting of a
$200 million revolving credit facility, a $50 million term loan and
a $50 million delayed draw term loan. The facility replaces DMC’s
prior $200 million credit facility.
“This new credit agreement strengthens our
balance sheet and improves our near-term financial flexibility as
we pursue strategic alternatives for our DynaEnergetics and
NobelClad businesses, and seek to transform DMC’s portfolio,” said
Michael Kuta, president and CEO. “Our enhanced liquidity will
support our growth strategies in the architectural framing
industry, including acquiring the remaining 40% minority interest
in Arcadia Products.”
In December 2021, DMC acquired a 60% controlling
interest in Arcadia Products LLC, a leading provider of
architectural building products to the commercial and
ultra-high-end residential construction industries. A put/call
option on the remaining 40% stake in Arcadia becomes exercisable on
December 23, 2024. The current estimated value of the put/call
option, net of a tax bridge loan, is approximately $163
million.
“This new credit facility holds our leverage and
debt service costs to a prudent level,” said Eric Walter, CFO. “We
are pleased to have the strong support of our lending group, which
has been expanded from four to seven institutions.”
Walter said DMC’s leverage ratio following the
close of the credit facility remains at 1.25x and is expected to be
approximately 2.0x if the Company executes the call on the 40%
minority interest in Arcadia.
The $50 million term loan and approximately $70
million of the $200 million revolving credit facility will be used
to refinance DMC’s existing bank debt. The $50 million delayed draw
term loan and unused capacity on the revolving credit facility will
be available to support the purchase of the remaining 40% of
Arcadia.
The term loan requires annual amortization of 5%
for the first two years, 7.5% for the next two years, and 10% in
the fifth year with a bullet at maturity. The covenants of the
credit facility have a maximum total leverage ratio of 3.00x and
minimum debt service coverage ratio of 1.25x.
KeyBank, N.A., is serving as administrative
agent, and the banking syndicate is made up of U.S. Bank, Bank of
America, Bank of Oklahoma, CIBC, Commerce Bank, and Comerica
Bank.
Safe Harbor Language Except for
the historical information contained herein, this news release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Such statements
and information are based on numerous assumptions regarding present
and future business strategies, our potential purchase of the
remaining 40% minority interest in Arcadia Products and Arcadia’s
growth strategy. Forward-looking information and statements are
subject to known and unknown risks, uncertainties and other
important factors that may cause actual results and performance to
be materially different from those expressed or implied by such
forward-looking information and statements, including but not
limited to: our ability to realize sales from our backlog; our
ability to obtain new contracts at attractive prices; the execution
of purchase commitments by our customers, and our ability to
successfully deliver on those purchase commitments; the size and
timing of customer orders and shipments; changes to customer
orders; product pricing and margins; fluctuations in customer
demand; our ability to successfully navigate slowdowns in market
activity or execute and capitalize upon growth opportunities; the
success of DynaEnergetics’ product and technology development
initiatives; our ability to successfully protect our technology and
intellectual property and the costs associated with these efforts;
consolidation among DynaEnergetics’ customers; fluctuations in
foreign currencies; fluctuations in tariffs and quotas; the cost
and availability of energy; the cyclicality of our business;
competitive factors; the timely completion of contracts; the timing
and size of expenditures; the timing and price of metal and other
raw material; the adequacy of local labor supplies at our
facilities; our ability to attract and retain key personnel;
current or future limits on manufacturing capacity at our various
operations; government actions or other changes in laws and
regulations; the availability and cost of funds; our ability to
access our borrowing capacity under our credit facility;
geopolitical and economic instability, including recessions,
depressions, wars or other military actions; inflation; supply
chain delays and disruptions; transportation disruptions; general
economic conditions, both domestic and foreign, impacting our
business and the business of our customers and the end-market users
we serve; as well as the other risks detailed from time to time in
our SEC reports, including the annual report on Form 10-K for the
year ended December 31, 2022. We do not undertake any obligation to
release public revisions to any forward-looking statement,
including, without limitation, to reflect events or circumstances
after the date of this news release, or to reflect the occurrence
of unanticipated events, except as may be required under applicable
securities laws.
About DMC GlobalDMC Global is
an owner and operator of innovative, asset-light manufacturing
businesses that provide unique, highly engineered products and
differentiated solutions. DMC’s businesses have established
leadership positions in their respective markets and consist of:
Arcadia, a leading supplier of architectural building products;
DynaEnergetics, which serves the global energy industry; and
NobelClad, which addresses the global industrial infrastructure and
transportation sectors. Based in Broomfield, Colorado, DMC trades
on Nasdaq under the symbol “BOOM.” For more information,
visit: HTTP://WWW.DMCGLOBAL.COM.
CONTACT:Geoff HighVice President of Investor
Relations303-604-3924
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