Dye and Durham Ltd. stock rose 9 per cent after announcing a series of refinancing transactions that will provide greater fiscal flexibility. The company aims to improve its share price and reduce its high indebtedness.
Dye and Durham Ltd. stock rose 9 per cent Friday after the acquisitive, heavily indebted legal software vendor said it had priced a series of refinancing transactions that will provide it with greater fiscal flexibility .
In March D&D, which has built its business through a string of acquisitions and by subsequently sharply increasing customer fees for using its products, revealed activist hedge fund Engine Capital, which typically targets undervalued companies, had requested a meeting of its shareholders. The hedge fund, which owns 5.1 per cent of its stock, is looking to secure three of the seven seats on the company’s board.
In its release Friday, D&D said it had priced and allocated US$350-million of a senior secured Term Loan B facility maturing in 2031. The facility will bear a floating interest rate equal to 4.25 percentage points above the Secured Overnight Financing Rate , a measure of the cost of borrowing money overnight collateralized by U.S. Treasury securities. The facility replaces costlier debt that paid an 5.75 percentage points above a benchmark known as the Canadian Dollar Offered Rate.
The complex set of transactions accomplish two key objectives for D&D: it will reduce annual interest expense by around $20 million annually, said one market participant briefed by the company. D&D did not disclose the interest savings in its release. The Globe and Mail is not identifying the source because they are not authorized to discuss the matter.
Dye And Durham Stock Refinancing Fiscal Flexibility Share Price Indebtedness
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