07/12/2023

Dye & Durham Provides Progress Update Regarding Debt Profile and Strategic Review

  • 41% of the Company’s debt is now fixed rate debt, an increase from 24% previously, reducing the volatility of the Company’s debt service costs
  • Appoints John Robinson as CEO of Canadian financial services infrastructure business
  • Upsizes and extends ongoing issuer bid as part of stated plan to improve balance sheet flexibility.

TORONTODec. 7, 2023 /CNW/ – Dye & Durham Limited (TSX: DND) (“Dye & Durham” or the “Company“), one of the world’s largest providers of cloud-based legal practice management software designed to make managing a law firm, organizing cases, and collaborating with clients easy, today provided an update regarding its progress on its previously announced deleveraging plan.

“Today’s update highlights the significant progress we are making towards achieving our stated goal of reducing our leverage ratio as quickly as possible to less than four times total net debt to adjusted EBITDA,” said Dye & Durham CEO Matthew Proud. “While our strategic review of non-core assets is moving ahead at a good pace, we’ve also taken important steps to further strengthen our balance sheet and to appoint a global-grade leader to our Canadian financial services business to build on its growth momentum.”

Increases Fixed Rate Debt as a Proportion of Total Debt

First, the Company has entered into a $250,000,000 interest rate swap (“IRS“) to manage its exposure to interest rate fluctuations on the Company’s credit facility.  With the IRS, 41% of the Company’s debt is now on a fixed rate, an increase from 24% previously which reduces the volatility of the Company’s debt servicing costs. Based on current rates, the Company’s weighted average interest rate on total debt is 9.4%.

Appointment of CEO of Canadian Financial Services Infrastructure Business

Second, the Company has appointed John Robinson as the Chief Executive Officer of its Canadian financial services infrastructure business, effective immediately. The Canadian financial services infrastructure business is one of the Company’s non-core assets, which is subject to its previously announced strategic review.

Mr. Robinson’s previous positions include President of Dye & Durham Canada, as well as Dye & Durham’s Global Chief Operating Officer and Global People and Commercial Officer. In this new role, Mr. Robinson will lead the Company’s Canadian financial services infrastructure business and focus on achieving its strategic growth objectives.

“We are extremely excited to announce that John has agreed to lead our Canadian financial services infrastructure business,” Mr. Proud said. “His extensive industry experience and expertise, as well as his existing knowledge and understanding of our business make John the ideal choice for this role.”

Upsizing and Extension of Substantial Issuer Bid

Finally, Dye & Durham announced that it has upsized and extended its existing substantial issuer bid (the “Offer“) to purchase for cancellation a portion of its issued and outstanding 3.75% senior unsecured convertible debentures due March 1, 2026 (the “Original Debentures“). The Offer is part of Dye & Durham’s plan, first announced on October 20, 2023, to improve the flexibility of its balance sheet and reduce its convertible debt.

Pursuant to the amendment and extension, the terms of which are set out in a notice of variation and extension dated December 7, 2023 (the “Notice of Variation“), the Company has offered to acquired up to $100,000,000 aggregate principal amount of the Original Debentures on the basis of, and at the election of the holder, for each $1,000 principal amount of Original Debentures: (a) $753 in cash (increased from $750), subject to an aggregate maximum of $36,144,000, (b) $1,250 principal amount of 6.50% senior unsecured extendible convertible debentures due November 1, 2028 (the “New Debentures“), subject to an aggregate maximum of $65,000,000, or (c) a combination of cash and New Debentures. In addition, the Company has extended the expiry date of the Offer to 5:00 p.m. (Eastern Time) on January 5, 2024, unless further extended, varied or withdrawn by the Company.

In connection therewith, the Company has entered into a written agreement with Canaccord Genuity Corp. (“Canaccord“) to extended the initial maturity date its outstanding New Debentures from December 22, 2023 to January 12, 2024, or, if earlier, the date on which the Company delivers to the debenture trustee a notice declaring that the Company will not be proceeding with the Offer.

All other terms of the Offer remain unchanged. Details of the Offer, including instructions for tendering Original Debentures, are included in the formal offer to purchase and issuer bid circular dated November 1, 2023 (the “Offer to Purchase“) as amended by the Notice of Variation (the Notice of Variation together with the with the Offer to Purchase, the letter of transmittal, and the notice of guaranteed delivery, the “Offer Documents“). The Notice of Variation will be mailed to debentureholders, filed with applicable Canadian securities regulatory authorities and made available without charge on SEDAR+ at www.sedarplus.ca. Debentureholders should carefully read the Offer Documents prior to making a decision with respect to the Offer.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws.

About Dye & Durham

Dye & Durham Limited provides premier practice management solutions empowering legal professionals every day, delivers vital data insights to support critical corporate transactions and enables the essential payments infrastructure trusted by government and financial institutions. The Company has operations in Canada, the United KingdomIrelandAustralia and South Africa. Additional information can be found at www.dyedurham.com.

Forward-looking Statements

This press release may contain forward-looking information within the meaning of applicable securities laws, which reflects the Company’s current expectations regarding future events, including with respect to the Company’s strategic review of its non-core assets, the independent growth thereof, the timing and completion of the Offer as amended by the Notice of Variation, and in respect of the Company’s plan to improve the flexibility of its balance sheet and reduce its convertible debt. In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management’s current beliefs, expectations, estimates and projections regarding future events and operating performance.

Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the risk that the Company is not able to effect a transaction in respect of its non-core assets and, that if it is, the results do not result in deleveraging, and the factors discussed under “Risk Factors” in the Company’s most recent annual information form and “Risks and Uncertainties” in the Company’s most recent management discussion & analysis on SEDAR+ at www.sedarplus.ca. Dye & Durham does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

SOURCE Dye & Durham Limited

For further information: Media Relations: Morgan McLellan, VP, Global Communications, Phone: 647-802-4825, E-mail: [email protected]; Investor Relations: Ross Marshall, LodeRock Advisors Inc., Phone:416-526-1563, E-mail: [email protected]

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