Ackroo, a gift card, and loyalty marketing technology and services provider, has secured a $4 million from BDC Capital. Under the terms of the loan, Ackroo will receive an initial tranche of $3 million on closing plus access to an additional $1 million disbursed should the company identify another acquisition where these additional funds can be leveraged.
The loan:
- Bears a 9.75% interest rate while EBITDA is under $750,000 per year and will reduce to a low of 7.5% once audited EBITDA is in excess of $1.1 million per year
- Requires no principal payments to be made until April 2021 and will be done in the form of an annual excess cash flow sweep.
- Includes a 2.55% annual royalty on clients acquired with the facility during the term of the loan, excluding the first year.
- Includes a 0.5% bonus on sale or change of control payment to be made to BDC Capital should the company sell the business during the term of the loan
- Includes a 1.5% processing fee of the value of the facility (as the funds are tranched) plus $100 a month financing management fee
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In connection with the debt financing the company will close on the acquisition of IQ724 from Mobi724 with the proceeds from this debt facility on July 2nd, 2019.
“Establishing a growing relationship with lenders like BDC Capital is a key priority for Ackroo,” said Steve Levely, CEO of Ackroo. “These funds will immediately go to work to close on our acquisition of IQ724 from Mobi724 and in turn will help add a significant amount of positive EBITDA to the company.”
BDC Capital is the investment arm of BDC – Canada’s only bank devoted exclusively to entrepreneurs.
