Digital Media Solutions Announces New $275 Million Senior Secured Credit Facility

Rhea-AI Summary

Digital Media Solutions, Inc. (NYSE: DMS) has secured a new $275 million five-year senior secured credit facility for its operating subsidiary. The facility includes $225 million in term loans and a $50 million revolving credit line. Proceeds will repay the previous $220 million facility. The new financing enhances liquidity and provides operational flexibility, with a lower amortization schedule. S&P and Moody's assigned credit ratings of 'B' and 'B2', respectively, reflecting the company's financial stability.

Positive

• New $275 million credit facility improves liquidity and operational flexibility.
• Lower amortization schedule enhances financial position.
• S&P and Moody's assigned favorable credit ratings of 'B' and 'B2'.

Negative

• Significant debt levels raised concerns among investors.
• Dependence on improving market conditions to meet leverage covenants.

Digital Media Solutions, Inc. (NYSE: DMS), a leading provider of technology-enabled digital performance advertising solutions connecting consumers and advertisers, today announced that its operating subsidiary, Digital Media Solutions, LLC, has entered into a new $275 million five-year senior secured credit facility, which consists of term loans in an aggregate principal amount of $225 million and a $50 million revolving credit facility.

Proceeds from the term loans were used to repay and terminate the previous $220 million senior secured credit facility, which consisted of term loans in an aggregate principal amount of $205 million and a $15 million revolving credit facility. At closing, the new revolver was undrawn.

In conjunction with the $275 million refinancing transaction, S&P Global Ratings assigned a ‘B’ Issuer Credit Rating and Moody’s Investors Service assigned a ‘B2’ Corporate Family Rating to Digital Media Solutions, LLC.

The new credit facility provides increased borrowing capacity, a new five-year tenor and lower amortization, along with greater strategic and operational flexibility. The revolving facility can be used to finance working capital needs, permitted acquisitions and investment, capital expenditures, and general corporate purposes.

“This new credit facility, with its increased capacity and extended maturity, is another important step in the financial transformation of Digital Media Solutions,” said Joe Marinucci, Digital Media Solutions Chief Executive Officer. “It provides us with increased financial flexibility to support our key growth initiatives.”

The new credit facility is governed by a maximum net leverage covenant of 5.00x, with a step down to 4.50x over time. Truist Securities, Inc. and Fifth Third Bank, National Association, acted as Joint Lead Arrangers and Joint Bookrunners for the financing. Truist Bank also serves as the Administrative Agent, Collateral Agent, a Lender and an Issuing Bank.

Safe Harbor Statement

This press release includes “forward-looking statements'' within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. DMS’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. These forward statements are often identified by words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions. These forward-looking statements include, without limitation, DMS’s expectations with respect to its future performance and its ability to implement its strategy, and are based on the beliefs and expectations of our management team from the information available at the time such statements are made. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside DMS’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) the COVID-19 pandemic or other public health crises; (2) changes in client demand for our services and our ability to adapt to such changes; (3) the entry of new competitors in the market; (4) the ability to maintain and attract consumers and advertisers in the face of changing economic or competitive conditions; (5) the ability to maintain, grow and protect the data DMS obtains from consumers and advertisers; (6) the performance of DMS’s technology infrastructure; (7) the ability to protect DMS’s intellectual property rights; (8) the ability to successfully source and complete acquisitions and to integrate the operations of companies DMS acquires; (9) the ability to improve and maintain adequate internal controls over financial and management systems, and remediate the identified material weakness; (10) changes in applicable laws or regulations and the ability to maintain compliance; (11) our substantial levels of indebtedness; (12) volatility in the trading price on NYSE of our common stock and warrants; (13) fluctuations in value of our private placement warrants; and (14) other risks and uncertainties indicated from time to time in DMS’s filings with the SEC, including those under “Risk Factors'' in DMS’s Annual Report on Form 10-K and its subsequent filings with the SEC. There may be additional risks that we consider immaterial or which are unknown, and it is not possible to predict or identify all such risks. DMS cautions that the foregoing list of factors is not exclusive. DMS cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. DMS does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.

About Digital Media Solutions

Digital Media Solutions, Inc. (NYSE: DMS) is a leading provider of technology-enabled digital performance advertising solutions connecting consumers and advertisers within auto, home, health and life insurance plus a long list of top consumer verticals. The DMS first-party data asset, proprietary advertising technology, significant proprietary media distribution and data-driven processes help digital advertising clients de-risk their advertising spend while scaling their customer bases. Learn more at https://digitalmediasolutions.com.

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FAQ

What is the new credit facility amount announced by Digital Media Solutions?

Digital Media Solutions announced a new $275 million five-year senior secured credit facility.

What will the proceeds of the new credit facility be used for?

Proceeds will be used to repay the previous $220 million senior secured credit facility.

What ratings were assigned to Digital Media Solutions by S&P and Moody's?

S&P assigned a 'B' Issuer Credit Rating and Moody's assigned a 'B2' Corporate Family Rating.

What is the significance of the $50 million revolving credit facility?

The $50 million revolving credit facility can be used for working capital, permitted acquisitions, and general corporate purposes.