Dye & Durham Announces $500 Million Bought Deal Offering of Common Shares and Convertible Debentures
/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./
TORONTO, Feb. 16, 2021 /CNW/ - Dye & Durham Limited ("Dye & Durham" or the "Company") (TSX: DND) today announced that it has entered into an agreement with an underwriting syndicate led by Canaccord Genuity Corp., BMO Capital Markets and Scotia Capital Inc. (collectively, the "Lead Underwriters" and collectively with the syndicate, the "Underwriters") to complete a new issue, on a bought deal basis, of: (i) an aggregate of 3,960,400 common shares at a purchase price of C$50.50 per common share for aggregate gross proceeds of approximately C$200 million (the "Common Share Offering"), and (ii) C$300 million aggregate principal amount of convertible unsecured subordinated debentures due March 1, 2026 (the "Debentures") at a price of $1,000 per Debenture (the "Debenture Offering" and, together with the Common Share Offering, the "Offerings").
Concurrently with the Offerings, certain significant shareholders of the Company have entered into a block trade agreement with the Lead Underwriters to sell an aggregate of 1,980,200 common shares at a purchase price of C$50.50.
The Company has granted the Underwriters an over-allotment option, exercisable for a period of 30 days from the date of closing of the Offerings, to purchase up to an additional 15% of the aggregate common shares to be sold pursuant to the Common Share Offering and 15% of the aggregate principal amount of Debentures to be sold under the Debenture Offering.
The Company intends to use the net proceeds of the Offerings to fund potential future acquisitions, for working capital requirements and other general corporate purposes.
Closing of the Offerings is expected to occur on or about February 23, 2021, subject to customary closing conditions, including required approvals of the Toronto Stock Exchange.
No securities regulatory authority has either approved or disapproved the contents of this press release. The common shares have not been, and will not be, registered under the United States Securities Act, of 1933, as amended (the "U.S. Securities Act") or any state securities laws, and are being offered and sold in the United States only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the U.S. Securities Act. 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 common shares in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Recap of Recent Financial Performance and Corporate Update
On February 14, 2021, the Company provided its financial results for the three months ended December 31, 2020 and provided corporate update. The key highlights were:
- Forecasted June 30, 2022, Adjusted EBITDA1 and Revenue of over $200 million and $340 million, respectively2.
- Expected Adjusted EBITDA1 of more than $30 million for the third quarter of current fiscal year2.
- Revenue of $33.7 million for the three months ended December 31, 2020, an increase of 96% from comparative period in the prior year.
- Adjusted EBITDA1 of $17.1 million for the three months ended December 31, 2020, an increase of $8.4 million or 96% from comparative period in the prior year.
- Net income of ($21.5) million for the three months ended December 31, 2020, a decrease of ($20.0) million from the comparative period in the prior year, primarily driven by non-cash stock-based compensation expense of $20.3 million.
About Dye & Durham
Dye & Durham Limited is a leading provider of cloud-based software and technology solutions designed to improve efficiency and increase productivity for legal and business professionals. Dye & Durham provides critical information services and workflows, which clients use to manage their process, information and regulatory requirements. The Company has operations in Canada and the United Kingdom, and has a strong blue-chip customer base that includes law firms, financial service institutions, and government organizations. Additional information can be found at www.dyedurham.com.
Non-IFRS Measures
This press release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies.
Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective and to discuss Dye & Durham's financial outlook. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of Dye & Durham's financial information reported under IFRS. The Company uses non-IFRS measures including: "EBITDA", "Adjusted EBITDA" and "Adjusted EBITDA margin".
EBITDA
EBITDA means net income (loss) before amortization and depreciation expenses, finance and interest costs, and provision for income taxes.
Adjusted EBITDA
Adjusted EBITDA adjusts EBITDA for stock-based compensation expense, asset impairment charges, loss on settlement of loans and borrowings, gains or losses from changes in fair value of derivative financial instruments and contingent consideration liabilities measured at fair value through profit or loss, specific transaction related expenses related to acquisitions, IPO and capital structure reorganization, operational restructuring costs, restructuring costs includes impact to the full year of cost synergies related to the reduction of employees in relation to acquisitions.
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1 |
Adjusted EBITDA is a non-IFRS measure. For the relevant definitions, see "Non-IFRS Financial Measures" section of this press release. Management believes non-IFRS measures, including EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin provide supplementary information to IFRS measures used in assessing the performance of the business. |
2 |
Forecasted Adjusted EBITDA and Revenue for the year ending June 30, 2022 and forecasted Adjusted EBITDA for the third quarter of the current fiscal year are considered forward-looking statements. Please see "Forward-Looking Information" below for important information regarding this forward-looking information. |
Forward-looking Statements
This press release contains forward–looking information and forward-looking statements (collectively, "forward-looking information") within the meaning of applicable securities legislation, which reflect the Company's current expectations regarding future events. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "forecast", "target", "goal", "may", "might", "will", "expect", "anticipate", "estimate", "intend", "plan", "indicate", "seek", "believe", "predict", or "likely", or the negative of these terms, or other similar expressions intended to identify forward-looking statements. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information.
In particular, the Company's intended use of proceeds from the Offerings, guidance on revenue and Adjusted EBITDA for the year ending June 30, 2022 and expected Adjusted EBITDA for the third quarter of the current fiscal year are considered forward-looking information. The foregoing demonstrates Dye & Durham's objectives and are based on the implementation of its strategic goals, growth prospects and growth initiatives. Management's assessments of, and outlook for, revenue and Adjusted EBITDA set out herein are generally based on the following assumptions: (a) Dye & Durham's results of operations will continue as expected, (b) the Company will continue effectively execute against its key strategic growth priorities, (c) the Company will continue to retain and grow its existing customer base and market share, (d) the Company will be able to take advantage of future prospects and opportunities, and realize on related synergies, including in respect of acquisitions, (e) there will be no changes in legislative or regulatory matters that negatively impact Dye & Durham's business, (f) current tax laws will remain in effect and will not be materially changed, (g) economic conditions will remain relatively stable throughout the period, and (h) the industries Dye & Durham operates in will continue to grow consistent with past experience. The Company considers these assumptions to be reasonable in the circumstances, given the time period for such projections and targets. The achievement of target revenue set out above is subject to significant risks including: (a) that the Company will be unable to effectively execute against its key strategic growth priorities and (b) the Company will be unable to continue to retain and grow its existing customer base and market share. These estimates have been prepared by and are the responsibility of management. The Company's independent registered public accounting firm has not conducted a review of, and does not express an opinion or any other form of assurance with respect to, these estimates.
Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events or circumstances. Such forward-looking information is necessarily based on a number of opinions, estimates and assumptions, including but not limited to those assumptions described under the heading "Caution Regarding Forward-Looking Information" in the Company's Management's Discussion & Analysis for the quarter ended December 31, 2020 (the "MD&A"). Forward-looking information is subject to and entirely qualified by known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results or performance to be materially different from those expressed or implied by such forward-looking information, including but not limited to factors discussed under the heading "Risk Factors" in the Company's final long-form prospectus dated July 13, 2020 and under the heading "Risks and Uncertainties" in the MD&A, which are available on the Company's profile on SEDAR at www.sedar.com. If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. Accordingly, investors should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this news release represents the Company's expectations as of the date of this news release, and are subject to change after such date and the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.
SOURCE Dye & Durham
Adam Peeler, LodeRock Advisors Inc., [email protected], 416.427.1235
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