DND Dye and Durham Limited

• Provides enhanced financial flexibility to execute upon strategic priorities
• Estimated annualized net interest cost savings of approximately CAD $20 million 

TORONTO, April 11, 2024 /CNW/ - Dye & Durham Limited ("Dye & Durham") (TSX: DND) today announced that Dye & Durham Corporation (the "Company"), a wholly-owned subsidiary of Dye & Durham, has closed its previously announced private offering of USD $555 million aggregate principal amount of its 8.625% senior secured notes due 2029 (the "New Senior Secured Notes"), its previously announced USD $350 million aggregate principal amount senior secured Term Loan B Facility (the "New Term Loan Facility") and its CAD $105 million revolving credit facility (the "New Revolving Facility", together with the New Term Loan Facility, the "New Senior Secured Credit Facilities", and together with the New Senior Secured Notes, the "Refinancing Transactions").

"We believe the success of the refinancing transactions reflect investors' confidence in our business, performance, and leadership position within the global legal technology market," said Matt Proud, Chief Executive Officer of Dye & Durham. "We expect this refinancing will generate approximately CAD $20 million in annualized net interest cost savings, providing us with enhanced financial flexibility, a strengthened balance sheet, and positioning us well to execute on our strategic priorities in an effort to drive sustainable shareholder value."

After giving effect to the Refinancing Transaction, Dye & Durham's total net senior debt to Further Adjusted EBITDA¹ for the last twelve months (LTM) ending December 31, 2023 will be 3.54 times. Dye & Durham's total net debt to Further Adjusted EBITDA for the last twelve months (LTM) ending December 31, 2023, which includes Dye & Durham's 3.75% convertible senior unsecured debentures due 2026 (the "2026 Debentures") and its 6.50% senior unsecured extendible convertible debentures due November 1, 2028,  will be 4.78 times. The foregoing does not take into account the application of the proceeds of the Refinancing Transaction to acquire any of the 2026 Debentures, which Dye & Durham has expressed an intention to do.

Dye & Durham will place C$185 million of the proceeds from the Refinancing Transactions in an escrow account, which amount will be held until the earlier of (a) the repurchase by Dye & Durham of all of the outstanding 2026 Debentures, or (b) the maturity date of the 2026 Debentures.

The New Senior Secured Notes mature in 2029 and bear an interest rate of 8.625% per year (representing a spread to benchmark U.S. treasury notes of 431 basis points) payable semi-annually. The New Term Loan Facility bears a floating interest rate equal to Secured Overnight Financing Rate ("SOFR") subject to a 1.00% floor plus an applicable margin of 4.25% plus a specified credit spread adjustment. The applicable margin will be reduced by 25 basis points upon achievement of a specified first lien net leverage ratio. The New Term Loan Facility matures in 2031 and the New Revolving Facility matures in 2029, in each case subject to a springing maturity 91 days inside the New Senior Secured Notes if the New Senior Secured Notes have not been repaid in full, extended, refinanced or replaced on or prior to such date. The New Senior Secured Notes are guaranteed on a senior secured basis by Dye & Durham and by all wholly-owned subsidiaries of Dye & Durham that guarantee the Company's New Senior Secured Credit Facilities.

In connection with the Refinancing Transactions and concurrently with closing, the Company repaid all amounts outstanding under its Credit Agreement dated as of December 31, 2021, as amended (the "Existing Credit Agreement").  The Company intends to use the remaining net proceeds of the offering of the New Senior Secured Notes, together with the proceeds of the initial borrowings under the New Senior Secured Credit Facilities and cash on hand to (i) repurchase some or all of the 2026 Debentures and (ii) finance working capital needs and for general corporate purposes. The refinancing of the Company's Existing Credit Agreement addresses the risk that the Existing Credit Agreement's maturity would have accelerated in the event that any of Dye & Durham's 2026 Debentures remained outstanding as of September 30, 2025.

The New Senior Secured Notes were offered only to persons reasonably believed to be qualified institutional buyers in a private placement offering exempt from registration in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act and pursuant to applicable prospectus exemptions. The New Senior Secured Notes and related guarantees have not been registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States without registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act or any other applicable state securities laws. Additionally, in Canada, an offering of New Senior Secured Notes was made pursuant to exemptions from the prospectus requirements of applicable Canadian securities laws and will be subject to resale restrictions pursuant to Canadian securities laws.

This press release does not constitute an offer to sell nor a solicitation of an offer to buy the New Senior Secured Notes or any other securities, nor shall there be any offer, solicitation, or sale of the New Senior Secured Notes or any other securities in any jurisdiction in which such an offering, solicitation or sale would be unlawful prior to the registration or qualification thereof under the securities laws of any such jurisdiction. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

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. Dye & Durham has operations in Canada, the United Kingdom, Ireland, Australia and South Africa.

Additional information can be found at www.dyedurham.com.

1)  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 Dye & Durham's results of operations from management's perspective and to discuss Dye & Durham's financial outlook. Dye & Durham's definitions of non-IFRS measures may not be the same as the definitions for such measures used by other companies in their reporting. Non-IFRS measures have limitations as analytical tools. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of Dye & Durham's financial information reported under IFRS. Dye & Durham uses non-IFRS measures, including "Further Adjusted EBITDA" to provide investors with supplemental measures of its operating performance and to eliminate items that management believes has less bearing on operating performance or operating conditions and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. Dye & Durham's management also uses non-IFRS financial measures in order to facilitate operating performance comparisons from period to period. Dye & Durham believes that securities analysts, investors, and other interested parties frequently use non-IFRS financial measures in the evaluation  of issues.

Please see "Cautionary Note Regarding Non-IFRS Measures" and "Select Information and Reconciliation of Non-IFRS Measures" in Dye & Durham's most recent Management's Discussion and Analysis, which is available on its profile on SEDAR+ at www.sedarplus.ca, for further details on certain non- IFRS measures, including relevant reconciliations of each non-IFRS measure to its most directly comparable IFRS measure, which information is incorporated by reference herein.

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.

Further Adjusted EBITDA

Further Adjusted EBITDA further adjusts Adjusted EBITDA for the impact of (i) business acquired in the twelve months ended December 31, 2023 attributable to the portion of such period prior to the date of acquisition of each entity, inclusive of due diligence adjustments, (ii) the removal of the results of TM Group, which Dye & Durham divested in Q1 2024 and (iii) platform consolidation, cost savings and other realized and reasonably anticipated synergies in respect of acquisitions consummated prior to December 31, 2023, as if such synergies had been fully realized as of January 1, 2023 and realized and reasonably anticipated cost savings derived from integration initiatives, including employee rationalization, operational efficiencies relating to IT infrastructure integration and IT outsourcing.

Forward-looking Statements

This press release may contain forward-looking information within the meaning of applicable securities laws, which reflects Dye & Durham's current expectations regarding future events. 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. Specifically, forward-looking statements include, without limitation, expected net interest cost savings and expectations regarding the use of proceeds of the offering of the Refinancing Transactions.

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 Dye & Durham'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, including, without limitation, the risk that the Refinancing Transactions do not close or are not as successful as they are intended to be, the use of proceeds therefrom and other factors discussed under "Risk Factors" in Dye & Durham's most recent annual information form. 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. Although Dye & Durham has attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to it or that it presently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information.

There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents Dye & Durham's expectations as of the date specified herein, and are subject to change after such date. However, Dye & Durham disclaims any intention or obligation or undertaking to update or revise any forward-looking information or to publicly announce the results of any revisions to any of those statements, whether as a result of new information, future events or otherwise, except as required under applicable securities laws. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements.

SOURCE Dye & Durham Limited