Advent Software, a provider of software and services for the investment management industry, announced it recently closed a $425 million senior credit facility. The company also announced a one-time special cash dividend of $9 per share totaling around $470 million. The stock is surging nearly 9 percent in pre-market activity.
The credit facility is composed of a $225 million term loan facility and a $200 million revolving credit facility. The new term loan has repayments of $5 million per quarter and the remaining will mature in June 2018. The revolving credit facility will also mature in June 2018.
J.P. Morgan Securities and BofA Merrill Lynch acted as joint lead arrangers and joint bookrunners for the senior credit facility.
The special dividend was approved by Advent’s board of directors on June 12. It will be payable on July 9 to stockholders of record at the close of business on July 1. The special dividend will be financed with cash on hand and proceeds from the credit facility.
Of the $9 per share distribution, between $2 and $4 per share is expected to be characterized as a dividend. The remaining amount of the distribution will be characterized as a return of capital.
The company also modified its outstanding stock option awards to reflect the dividend by reducing the exercise price by $9 per option.
Pete Hess, Advent’s CEO and president, said, “Advent’s Board believes we can best maximize shareholder value by taking advantage of the favorable liquidity and flexibility of current debt capital markets with a recapitalization of our balance sheet, which allows us to return capital to shareholders and enable them to continue to participate in Advent’s future performance.”