Significantly increases financing capacity to fund future acquisitions and growth initiatives
Kontrol Technologies Corp. a leader in smart buildings and cities through IoT, Cloud and SaaS technology, is pleased to announce that it has entered into a credit agreement (the “Credit Agreement”) with a Schedule 1 bank (the “Lender”) for up to $50 million in senior secured credit facilities (the “Facilities”).
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The Facilities will consist of the following: (i) a term loan facility of up to $20 million (the “Term Loan”), (ii) a revolving credit facility of up to $10 million, subject to borrowing base requirements based on eligible receivables, and inventory (the “Revolver”), and (iii) an accordion feature of up to $20 million (the “Accordion”). Upon closing of the Facilities, the Company expects to have drawn approximately $6 million on the Term Loan.
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The Facilities will bear interest on a monthly basis at Bank Prime rate plus a margin (between 1.25% and 2.0%) with principal repayments under the Term Loan equal to 1.25% of the drawn amount, payable in quarterly installments. The Facilities are secured by a general security agreement and Company guarantees.
The Term Loan is intended to pay off the existing operating line and refinance the Company’s unsecured debentures, which are maturing in the fourth quarter of the current fiscal year. The Revolver will provide added liquidity whenever necessary to manage working capital needs. The Accordion will support the Company’s M&A growth strategy.
“These Facilities will streamline the balance sheet by consolidating debt and lowering the Company’s cost of capital. It will also add capacity for M&A that provides financial flexibility to allow capital deployment in a timely manner as we execute on potential acquisitions,” said Paul Ghezzi, CEO Kontrol.
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