EverCommerce Inc. (NASDAQ:EVCM), a provider of software services with a market capitalization of $2.24 billion, has successfully renegotiated the terms of its existing debt.
Trading near its 52-week high of $12.35, the company announced through a filing with the Securities and Exchange Commission that it had entered into a third amendment to its credit agreement, originally dated July 6, 2021. According to InvestingPro analysis, the company maintains strong liquidity with a current ratio of 1.81, indicating solid short-term financial health.
According to the filing, on December 13, 2024, subsidiaries of EverCommerce secured a refinancing of their $533.5 million term loan facility. This strategic financial move primarily aimed to remove the credit spread adjustment related to Term SOFR Loans and to reduce the applicable margin by 50 basis points across all term loans.
The new Term B-1 Loans, which replaced the previous class of term loans, bear interest at the option of the borrower at either Term SOFR plus a margin of 2.50% with a minimum Term SOFR rate of 0.50%, or an Alternate Base Rate plus a margin of 1.50% with a minimum Alternate Base Rate of 1.50%. Notably, the amendment eliminates step-downs and the Term B-1 Loans were priced at par.
The proceeds from the new Term B-1 Loans were used to completely refinance the existing term loans under the credit agreement immediately before the amendment took effect. The removal of the credit spread adjustment for Term SOFR Loans signifies a simplification of the borrowing costs associated with these loans.
The filing details that the Royal Bank of Canada served as the administrative agent and collateral agent for this transaction, with other undisclosed parties and lenders involved.
This financial restructuring is expected to provide EverCommerce with a more favorable interest rate environment for its debt obligations, potentially leading to reduced interest expenses and improved financial flexibility for the company.
The information provided in this article is based on a press release statement and SEC filings by EverCommerce Inc.
In other recent news, EverCommerce Inc. has reported a modest increase in its Q3 2024 earnings, with total revenue reaching $176.3 million, a 0.9% increase year-over-year. The company's adjusted EBITDA rose to $44.5 million, showing a margin of 25.3%.
EverCommerce anticipates Q4 2024 revenue to be between $168 million and $172 million, with an adjusted EBITDA of $43 million to $46 million. In another development, EverCommerce has managed to reduce its debt costs through the repricing of its $533.5 million term loan.
This repricing, which adjusts the interest rate to the Secured Overnight Financing Rate (SOFR) plus 2.50%, is expected to save the company approximately $3.3 million annually in interest expenses.
EverCommerce continues to explore merger and acquisition opportunities and is aiming for a reacceleration in organic growth in 2025 and beyond. These are the recent developments for EverCommerce, which maintains a healthy current ratio of 1.81, with liquid assets exceeding short-term obligations.
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