Business Context and Reporting Period
Company: I3 Verticals, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: February 11, 2020
Reporting Period: Single event date (February 11, 2020)
This filing reports the announcement of a new debt offering and a concurrent amendment to the company's existing credit agreement.
Key Financial Metrics and Capital Structure
Debt Offering:
- Instrument: Exchangeable Senior Notes due 2025.
- Issuer: i3 Verticals, LLC (guaranteed by i3 Verticals, Inc.).
- Principal Amount: $100 million aggregate principal amount.
- Over-allotment Option: Initial purchasers may be granted the right to purchase up to an additional $15 million.
- Target Investors: Qualified institutional buyers under Rule 144A.
Credit Facility Amendment:
- Existing Facility: Revolving Credit Facility of $300 million.
- Amended Facility: Decreased to $275 million effective upon issuance of the notes.
- Incremental Capacity: Option to increase facility or obtain term loans up to $50 million remains subject to additional commitments.
Liquidity and Margins: The filing text does not provide specific values for revenue, profit, cash flow, or operating margins.
Material Changes Versus Prior Period
The filing details structural changes to the company's debt covenants and capacity effective upon the issuance of the new notes:
- Covenant Modifications: Amendments permit the issuance of exchangeable notes, call spread hedging transactions, and related settlements.
- Leverage Ratios:
- Maximum permitted consolidated total leverage ratio increased.
- Consolidated senior leverage ratio replaced with a consolidated senior secured leverage ratio.
- Interest Coverage: Change in the calculation method for the consolidated interest coverage ratio.
- Facility Size: Reduction of the Revolving Credit Facility maximum from $300 million to $275 million.
Guidance, Outlook, and Risks
Conditions: The offering of the Exchangeable Senior Notes is subject to market and other conditions.
Regulatory Status: The notes are not registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption. They are offered only to qualified institutional buyers.
Management Commentary: The filing incorporates a press release (Exhibit 99.1) by reference but does not contain direct management commentary on future performance or strategic outlook within the text provided.
Investor Verification Checklist
- Verify the final pricing and terms of the $100 million Exchangeable Senior Notes due 2025.
- Confirm whether the $15 million over-allotment option was exercised by initial purchasers.
- Review the full text of the Second Amendment to the Credit Agreement to understand specific covenant thresholds.
- Check subsequent filings for the actual closing date of the offering and the use of proceeds.
- Monitor the company's consolidated leverage ratios to ensure compliance with the new senior secured leverage ratio covenant.