8x8, Inc. Announces $250 Million Senior Secured Term Loan Credit Facility in a Customized Capital Solution Led by Francisco Partners
8x8, Inc. (NYSE: EGHT) has secured a new $250 million senior secured term loan facility led by Francisco Partners. This funding aims to facilitate the repurchase of approximately $60 million of common stock and the cash portion of an exchange for about $404 million in convertible debt due 2024. The term loan matures in July 2027, carrying an interest rate of SOFR plus 6.50%. Additionally, the company issued warrants for 3.1 million shares at an exercise price of $7.15. The transactions reflect 8x8's strategy to enhance operational efficiency and maintain liquidity.
- Secured a $250 million senior secured term loan facility, enhancing liquidity.
- Funding will support a $60 million share repurchase, potentially increasing shareholder value.
- The loan facility extends the maturity of over 80% of the 2024 convertible debt, reducing refinancing risk.
- Operational efficiency improvements led to favorable terms for the loan agreement.
- Interest on the loan is relatively high, at SOFR + 6.50%, which may increase financial strain.
- The issuance of warrants may result in future shareholder dilution.
“We are excited to partner with 8x8 by providing a customized capital solution,” said
“Francisco Partners’ commitment of capital to 8x8 recognizes the opportunity and importance of our XCaaS vision to deliver a single-vendor cloud communications and contact center solution that empowers workers in today’s hybrid workplaces,” said
Term Loan Facility Details
The term loan facility will mature in
In conjunction with the term loan facility, the Company also issued detachable warrants exercisable for an aggregate of 3.1 million shares of the Company’s common stock to
Loans under the Credit Agreement contain customary financial covenants as well as affirmative and negative covenants customary for transactions of this type, including minimum liquidity and limitations with respect to indebtedness, liens, investments, dividends, disposition of assets, change in business and transactions with affiliates.
The Credit Agreement will be guaranteed by certain of the Company’s wholly-owned subsidiaries, other than immaterial subsidiaries and other customary exceptions, and secured by a perfected security interest in substantially all of the Company’s tangible and intangible assets, as well as substantially all of the tangible and intangible assets of the guarantors.
The initial funding of loans under the Credit Agreement is expected to occur on
About
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Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. Any statements that are not statements of historical fact may be deemed to be forward-looking statements. For example, words such as "may," "will," "should," "estimates," "predicts," "potential," "continue," "strategy," "believes," "anticipates," "plans," "expects," "intends," and similar expressions are intended to identify forward-looking statements. These forward-looking statements, include but are not limited to the Company's ability to close the foregoing transactions on the timeline described, with the terms anticipated, or at all and whether the Company remains cash flow positive and profitable on a non-GAAP basis. Actual results could differ materially from those projected in forward-looking statements depending on a variety of factors. These include that the closing of the transactions is subject to closing conditions. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's reports on Forms 10-K and 10-Q, as well as other reports that 8x8 files from time to time with the
View source version on businesswire.com: https://www.businesswire.com/news/home/20220803006069/en/
Investor Relations:
katherine.patterson@8x8.com
Media:
john.sun@8x8.com
Francisco Partners Contact:
wclay@sloanepr.com
Source:
FAQ
What is the purpose of 8x8 Inc.'s new $250 million loan facility?
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