- Provides enhanced financial flexibility to execute upon
strategic priorities
- Estimated annualized net interest cost savings of
approximately CAD $20
million
TORONTO, April 11,
2024 /CNW/ - Dye & Durham Limited ("Dye
& Durham") (TSX: DND) today announced that Dye & Durham
Corporation (the "Company"), a wholly-owned subsidiary of
Dye & Durham, has closed its previously announced private
offering of USD $555 million
aggregate principal amount of its 8.625% senior secured notes due
2029 (the "New Senior Secured Notes"), its previously
announced USD $350 million aggregate
principal amount senior secured Term Loan B Facility (the "New
Term Loan Facility") and its CAD $105
million revolving credit facility (the "New Revolving
Facility", together with the New Term Loan Facility, the
"New Senior Secured Credit Facilities", and together with
the New Senior Secured Notes, the "Refinancing
Transactions").
"We believe the success of the refinancing transactions reflect
investors' confidence in our business, performance, and leadership
position within the global legal technology market," said
Matt Proud, Chief Executive Officer
of Dye & Durham. "We expect this refinancing will generate
approximately CAD $20 million in
annualized net interest cost savings, providing us with enhanced
financial flexibility, a strengthened balance sheet, and
positioning us well to execute on our strategic priorities in an
effort to drive sustainable shareholder value."
After giving effect to the Refinancing Transaction, Dye &
Durham's total net senior debt to Further Adjusted
EBITDA1 for the last twelve months (LTM) ending
December 31, 2023 will be 3.54 times.
Dye & Durham's total net debt to Further Adjusted EBITDA for
the last twelve months (LTM) ending December
31, 2023, which includes Dye & Durham's 3.75%
convertible senior unsecured debentures due 2026 (the "2026
Debentures") and its 6.50% senior unsecured extendible
convertible debentures due November
1, 2028, will be 4.78 times. The foregoing does not
take into account the application of the proceeds of the
Refinancing Transaction to acquire any of the 2026 Debentures,
which Dye & Durham has expressed an intention to do.
Dye & Durham will place C$185
million of the proceeds from the Refinancing Transactions in
an escrow account, which amount will be held until the earlier of
(a) the repurchase by Dye & Durham of all of the outstanding
2026 Debentures, or (b) the maturity date of the 2026
Debentures.
The New Senior Secured Notes mature in 2029 and bear an interest
rate of 8.625% per year (representing a spread to benchmark U.S.
treasury notes of 431 basis points) payable semi-annually. The New
Term Loan Facility bears a floating interest rate equal to Secured
Overnight Financing Rate ("SOFR") subject to a 1.00% floor
plus an applicable margin of 4.25% plus a specified credit spread
adjustment. The applicable margin will be reduced by 25 basis
points upon achievement of a specified first lien net leverage
ratio. The New Term Loan Facility matures in 2031 and the New
Revolving Facility matures in 2029, in each case subject to a
springing maturity 91 days inside the New Senior Secured Notes if
the New Senior Secured Notes have not been repaid in full,
extended, refinanced or replaced on or prior to such date. The New
Senior Secured Notes are guaranteed on a senior secured basis by
Dye & Durham and by all wholly-owned subsidiaries of Dye &
Durham that guarantee the Company's New Senior Secured Credit
Facilities.
In connection with the Refinancing Transactions and concurrently
with closing, the Company repaid all amounts outstanding under its
Credit Agreement dated as of December 31,
2021, as amended (the "Existing Credit
Agreement"). The Company intends to use the remaining net
proceeds of the offering of the New Senior Secured Notes, together
with the proceeds of the initial borrowings under the New Senior
Secured Credit Facilities and cash on hand to (i) repurchase some
or all of the 2026 Debentures and (ii) finance working capital
needs and for general corporate purposes. The refinancing of the
Company's Existing Credit Agreement addresses the risk that the
Existing Credit Agreement's maturity would have accelerated in the
event that any of Dye & Durham's 2026 Debentures remained
outstanding as of September 30,
2025.
The New Senior Secured Notes were offered only to persons
reasonably believed to be qualified institutional buyers in a
private placement offering exempt from registration in reliance on
Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"), and to non-U.S. persons outside
the United States in reliance on
Regulation S under the Securities Act and pursuant to applicable
prospectus exemptions. The New Senior Secured Notes and related
guarantees have not been registered under the Securities Act or any
state securities laws and, unless so registered, may not be offered
or sold in the United States
without registration or an applicable exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act or any other applicable state securities laws.
Additionally, in Canada, an
offering of New Senior Secured Notes was made pursuant to
exemptions from the prospectus requirements of applicable Canadian
securities laws and will be subject to resale restrictions pursuant
to Canadian securities laws.
This press release does not constitute an offer to sell nor a
solicitation of an offer to buy the New Senior Secured Notes or any
other securities, nor shall there be any offer, solicitation, or
sale of the New Senior Secured Notes or any other securities in any
jurisdiction in which such an offering, solicitation or sale would
be unlawful prior to the registration or qualification thereof
under the securities laws of any such jurisdiction. This press
release is being issued pursuant to and in accordance with Rule
135c under the Securities Act.
About Dye & Durham
Dye & Durham Limited provides premier practice management
solutions empowering legal professionals every day, delivers vital
data insights to support critical corporate transactions and
enables the essential payments infrastructure trusted by government
and financial institutions. Dye & Durham has operations in
Canada, the United Kingdom, Ireland, Australia and South
Africa.
Additional information can be found at www.dyedurham.com.
1) Non-IFRS Measures
This press release makes reference to certain non-IFRS measures.
These measures are not recognized measures under IFRS, do not have
a standardized meaning prescribed by IFRS and are therefore
unlikely to be comparable to similar measures presented by other
companies. Rather, these measures are provided as additional
information to complement those IFRS measures by providing further
understanding of Dye & Durham's results of operations from
management's perspective and to discuss Dye & Durham's
financial outlook. Dye & Durham's definitions of non-IFRS
measures may not be the same as the definitions for such measures
used by other companies in their reporting. Non-IFRS measures have
limitations as analytical tools. Accordingly, these measures should
not be considered in isolation nor as a substitute for analysis of
Dye & Durham's financial information reported under IFRS. Dye
& Durham uses non-IFRS measures, including "Further Adjusted
EBITDA" to provide investors with supplemental measures of its
operating performance and to eliminate items that management
believes has less bearing on operating performance or operating
conditions and thus highlight trends in its core business that may
not otherwise be apparent when relying solely on IFRS financial
measures. Dye & Durham's management also uses non-IFRS
financial measures in order to facilitate operating performance
comparisons from period to period. Dye & Durham believes that
securities analysts, investors, and other interested parties
frequently use non-IFRS financial measures in the evaluation
of issues.
Please see "Cautionary Note Regarding Non-IFRS Measures" and
"Select Information and Reconciliation of Non-IFRS Measures" in Dye
& Durham's most recent Management's Discussion and Analysis,
which is available on its profile on SEDAR+ at www.sedarplus.ca,
for further details on certain non- IFRS measures, including
relevant reconciliations of each non-IFRS measure to its most
directly comparable IFRS measure, which information is incorporated
by reference herein.
Adjusted EBITDA
Adjusted EBITDA adjusts EBITDA for stock-based compensation
expense, asset impairment charges, loss on settlement of loans and
borrowings, gains or losses from changes in fair value of
derivative financial instruments and contingent consideration
liabilities measured at fair value through profit or loss, specific
transaction related expenses related to acquisitions, IPO and
capital structure reorganization, operational restructuring costs,
restructuring costs includes impact to the full year of cost
synergies related to the reduction of employees in relation to
acquisitions.
Further Adjusted EBITDA
Further Adjusted EBITDA further adjusts Adjusted EBITDA for the
impact of (i) business acquired in the twelve months ended
December 31, 2023 attributable to the
portion of such period prior to the date of acquisition of each
entity, inclusive of due diligence adjustments, (ii) the removal of
the results of TM Group, which Dye & Durham divested in Q1 2024
and (iii) platform consolidation, cost savings and other realized
and reasonably anticipated synergies in respect of acquisitions
consummated prior to December 31,
2023, as if such synergies had been fully realized as of
January 1, 2023 and realized and
reasonably anticipated cost savings derived from integration
initiatives, including employee rationalization, operational
efficiencies relating to IT infrastructure integration and IT
outsourcing.
Forward-looking Statements
This press release may contain forward-looking information
within the meaning of applicable securities laws, which reflects
Dye & Durham's current expectations regarding future events. In
some cases, but not necessarily in all cases, forward-looking
statements can be identified by the use of forward-looking
terminology such as "plans", "targets", "expects" or "does not
expect", "is expected", "an opportunity exists", "is positioned",
"estimates", "intends", "assumes", "anticipates" or "does not
anticipate" or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could",
"would", "might", "will" or "will be taken", "occur" or "be
achieved". In addition, any statements that refer to expectations,
projections or other characterizations of future events or
circumstances contain forward-looking statements. Specifically,
forward-looking statements include, without limitation, expected
net interest cost savings and expectations regarding the use of
proceeds of the offering of the Refinancing Transactions.
Forward-looking statements are not historical facts, nor
guarantees or assurances of future performance but instead
represent management's current beliefs, expectations, estimates and
projections regarding future events and operating performance.
Forward-looking information is based on a number of assumptions and
is subject to a number of risks and uncertainties, many of which
are beyond Dye & Durham's control, which could cause actual
results and events to differ materially from those that are
disclosed in or implied by such forward-looking information,
including, without limitation, the risk that the Refinancing
Transactions do not close or are not as successful as they are
intended to be, the use of proceeds therefrom and other factors
discussed under "Risk Factors" in Dye & Durham's most recent
annual information form. If any of these risks or uncertainties
materialize, or if the opinions, estimates or assumptions
underlying the forward-looking information prove incorrect, actual
results or future events might vary materially from those
anticipated in the forward-looking information. Although Dye &
Durham has attempted to identify important risk factors that could
cause actual results to differ materially from those contained in
forward-looking information, there may be other risk factors not
presently known to it or that it presently believes are not
material that could also cause actual results or future events to
differ materially from those expressed in such forward-looking
information.
There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information. No
forward-looking statement is a guarantee of future results.
Accordingly, you should not place undue reliance on forward-looking
information, which speaks only as of the date made. The
forward-looking information contained in this press release
represents Dye & Durham's expectations as of the date specified
herein, and are subject to change after such date. However, Dye
& Durham disclaims any intention or obligation or undertaking
to update or revise any forward-looking information or to publicly
announce the results of any revisions to any of those statements,
whether as a result of new information, future events or otherwise,
except as required under applicable securities laws. Comparisons of
results for current and any prior periods are not intended to
express any future trends or indications of future performance,
unless specifically expressed as such, and should only be viewed as
historical data.
All of the forward-looking information contained in this press
release is expressly qualified by the foregoing cautionary
statements.
SOURCE Dye & Durham Limited