Repay Holdings Corp. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Repay Holdings Corporation (REPAY) on February 10, 2020. The filing discloses the completion of a material acquisition and the amendment of the company's credit facilities to fund the transaction.
Key Financial Metrics and Transaction Details
- Acquisition Consideration: Approximately $36 million in cash paid at closing to acquire CDT Technologies, LTD. d/b/a Ventanex.
- Contingent Consideration: Performance-based earnouts for the 12-month periods ending December 31, 2020, and 2021, with potential additional cash payments up to $14 million.
- Debt Financing:
- Incremental Term Loan: $46 million to fund the acquisition and repay existing revolving loans.
- Delayed Draw Term Loan (DDTL): Up to $60 million available for future acquisitions and earn-out obligations.
- Revolving Credit Facility: Increased from $20 million to $30 million.
- Debt Terms: All loans under the amended Credit Agreement mature on the fifth anniversary of the Amendment Date (February 10, 2025). A 0.50% per annum commitment fee applies to the unused DDTL facility starting 31 days post-amendment.
Material Changes Versus Prior Period
The filing does not provide comparative financial statements (revenue, profit, or cash flow) for the prior period. The primary material change is the expansion of the company's debt capacity and the addition of Ventanex as a subsidiary. The Credit Agreement was amended to reset maximum total net leverage ratio levels and increase the cash netting allowance for leverage calculations from $20 million to $25 million.
Outlook, Risks, and Contingencies
- Future Obligations: The company faces potential cash outflows of up to $14 million dependent on Ventanex's future performance.
- Regulatory Filings: Financial statements and pro forma information for Ventanex are required to be filed within 71 days of the acquisition date.
- Conditions Precedent: The $60 million DDTL facility is subject to satisfaction of certain conditions set forth in the Credit Agreement and has a nine-month availability period.
Investor Verification Checklist
- Verify the pro forma financial impact of the Ventanex acquisition once filed (due within 71 days).
- Review the specific performance metrics required to trigger the $14 million earn-out payments.
- Assess the impact of the new $46 million incremental term loan and increased leverage ratios on the company's liquidity and covenant compliance.
- Confirm the terms of the 0.50% commitment fee on the unused $60 million DDTL facility.