MCLEAN, Va.–(BUSINESS WIRE)–KLDiscovery Inc. (“KLDiscovery”), a leading global provider of electronic discovery, information governance and data recovery services, today announced that certain of its subsidiaries (these subsidiaries , collectively, the “Loan Parties”) have entered into a new secured credit agreement, dated February 8, 2021 (the “New Credit Agreement”), with Wilmington Trust, the National Association and certain lenders, which increases the ability to loan from KLDiscovery, reduces annual debt payments from $17 million to $3 million and terminates all loan commitments under its prior senior credit agreement, dated December 9, 2016 with Royal Bank of Canada (the “Prior Credit Agreement”).
The New Credit Agreement provides for (i) initial term loans in the aggregate principal amount of $300 million (the “Original Term Loans”), (ii) deferred draw term loans in the amount in aggregate principal amount of $50 million (the “Deferred Draw Term Loans”). loans”) and (iii) revolving credit loans in the aggregate principal amount of $40 million (the “revolving credit loans”). The revolving credit loans represent a $10 million increase over the previous revolving credit loans they replace.
The initial term loans and the deferred draw term loans will bear interest at the adjusted Eurocurrency rate plus 6.50% per annum, or in the case of base rate loans, at the base rate plus 5 .50% per year. Revolving Credit Loans will bear interest at the Adjusted Eurocurrency Rate plus 4.00% per annum, or for Base Rate Loans, at the Base Rate plus 3.00% per annum. Rates are at the discretion of the lending parties. Initial term loans and deferred draw term loans are amortized at the rate of 1.00% of the total principal amount of the original term loans and outstanding deferred draw term loans, payable quarterly. This amortization rate is a significant improvement over the Prior Credit Agreement, going from 5.00% in the Prior Credit Agreement to 1.00% under the New Credit Agreement.
The Revolving Credit Loans, Initial Term Loans and Deferred Drawn Term Loans must each mature no earlier than February 8, 2026 and six months prior to the maturity of KLDiscovery’s Convertible Debentures due 2024.
“We are pleased to be able to refinance our old debt with more favorable financial terms and covenants as we continue to strengthen KLDiscovery for the long term,” said Christopher Weiler, Managing Director of KLDiscovery. “Reducing our annual debt repayments significantly improves our annual cash flow.”
KLDiscovery provides technology-enabled services and software to help law firms, corporations, government agencies and consumers solve complex data issues. The company has 32 locations, nine data centers and 18 data recovery labs in 18 countries and is a global leader in providing the best e-discovery, information governance and data recovery solutions to support litigation, regulatory compliance, internal investigations and data recovery. and the management needs of our clients. Serving clients for over 30 years, KLDiscovery offers data collection and forensic investigation, early case assessment, electronic discovery and data processing, application software and hosting of data for web-based document review, as well as managed document review services. Additionally, through its global Ontrack data recovery business, KLDiscovery offers world-class data recovery, email extraction and restoration, data destruction and tape management. KLDiscovery has been recognized as one of North America’s fastest growing companies by Inc. Magazine (Inc. 5000) and Deloitte (Deloitte’s Technology Fast 500) and CEO Chris Weiler has been recognized as 2014 Ernst & Young Entrepreneur of the Year™. Additionally, KLDiscovery is a Relativity Certified Partner and operates ISO/IEC 27001 certified data centers around the world. For more information, please email [email protected] or visit www.kldiscovery.com.
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical fact, including including, without limitation, statements regarding KLDiscovery’s future financial and business performance, the attractiveness of KLDiscovery’s product offerings and platform, and the value proposition of KLDiscovery’s products are forward-looking statements. When used in this press release, the words “estimates”, “plans”, “expects”, “anticipates”, “anticipates”, “plans”, “intends”, “believes ”, “seeks”, “may”, “will”, “should”, “future”, “propose” and variations of these similar words or expressions (or negative versions of these words or expressions) are intended to identify the forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of management of KLDiscovery, which may cause actual results or results. differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or results include: the continued impact of COVID-19, KLDiscovery’s ability to execute its new product development and commercialization plans and the timing of such development programs ; KLDiscovery’s estimates of the size of markets for its solutions; the rate and degree of market acceptance of KLDiscovery’s solutions; the success of other competing technologies that may become available; KLDiscovery’s ability to identify and integrate acquisitions; the performance and security of KLDiscovery’s services; potential litigation involving KLDiscovery; general economic conditions and the cyclical nature of certain markets affecting demand for KLDiscovery’s services; KLDiscovery’s substantial indebtedness levels; changes in complex laws and regulations in the United States and around the world; and the volatility of the market price of the common shares and warrants of KLDiscovery. These risks and other factors discussed in the “Risk Factors” section of KLDiscovery’s Annual Report on Form 10-K filed with the Securities Exchange Commission (“SEC”) and any other reports filed by KLDiscovery with the SEC could cause actual results to differ materially from those expressed or implied by any forward-looking statements made by KLDiscovery or on our behalf. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements to predict actual results. All statements speak only as of the date made and, except as required by law, KLDiscovery undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.