Advent Software Inc. (ADVS) announced the recapitalization transactions and a one-time special cash dividend of $9 per share totaling approximately $470 million.
The company said that the special dividend was approved by its Board on June 12, 2013 and will be payable on July 9, 2013 to stockholders of record at the close of business on July 1, 2013. Of the $9 per share distribution, Advent currently expects between $2 to $4 per share to be characterized as a dividend, and the remaining amount of the distribution to be characterized as a return of capital.
The company noted that the special dividend will be financed with cash on hand and proceeds from Advent's recently closed $425 million senior credit facility.
The $425 million senior credit facility is composed of a $225 million term loan facility and a $200 million revolving credit facility. The new term loan has repayments of $5 million per quarter and the remaining balance will mature in June 2018. Interest on the term loan and any revolving loan initially accrues at LIBOR + 225 basis points. Beginning in the fourth quarter of 2013, the LIBOR spread can be reduced to the extent Advent's leverage ratio decreases. The revolving credit facility will also mature in June 2018.
The company said that it modified its outstanding stock option awards to reflect the dividend by reducing the exercise price by $9 per option. For certain options that cannot be reduced by the full $9, Advent will compensate those option holders with a cash payment for the difference between $9 and the reduction of their exercise price. Holders of restricted stock units or RSU will receive the right to receive $9 per RSU upon vesting.
In connection with the recapitalization transactions, the Company said it incurred various fees from third parties that are not included in capitalized debt issue costs. The Company currently expects its financial results to be impacted by these third-party expenses, equity award modifications, and other debt costs.
For comments and feedback: editorial@rttnews.com