Comvest Capital Agents RMG Networks Facility
RMG Networks Holding announced it completed a second amendment to its senior credit facility with Comvest Capital and repaid all but $8 million of its existing debt.
The amended term loan facility bears annual interest at a base rate plus 6.25% or at LIBOR plus 7.5% (currently 8% including LIBOR floor), at the election of the borrower. This significantly reduces the company’s effective interest rate on borrowings from approximately 12%. Consistent with the company’s commitment to de-levering, the amendment also resets financial and operating covenants providing the company with substantial operating flexibility, eliminates quarterly principal amortization payments, and defers the entire unpaid portion of the facility until its maturity on April 19, 2018.
Combined with the $10 million of principal repaid in connection with the company’s follow-on equity offering in August, these most recent debt repayments and the credit facility amendment are expected to create interest and principal repayment savings in 2014 of over $5 million.
Garry McGuire, CEO of RMG Networks, commented, “We want to extend our thanks to our new administrative agent and continuing lender, Comvest Capital, for providing us with this flexible financing. The facility’s lower borrowing rate reduces our cost of capital significantly, and the amendments to our covenants provide us with the cushion we need to continue to invest in the growth of our business. De-levering our balance sheet was an important commitment we made to our shareholders, and our debt level now stands at $8 million, a more than reasonable level for a company at this point in our growth trajectory. Our focus remains on execution as we pursue our growth strategy to scale both organically and through selected acquisitions and to continue our leadership in the ad-tech-video media marketplace.”
RMG Networks is a global provider of digital signage media solutions for corporate networks, consumer networks and advertising networks.