Machine-to-machine satellite operator Orbcomm has entered into a multi-facility senior secured credit agreement worth up to US$160m with Macquarie Group.
The financing is split between a US$70m initial term loan, a revolving credit facility of up to…
Machine-to-machine satellite operator Orbcomm has entered into a multi-facility senior secured credit agreement worth up to US$160m with Macquarie Group.
The financing is split between a US$70m initial term loan, a revolving credit facility of up to US$10m and a series of acquisition term loan facilities worth up to US$80m to fund potential growth opportunities.
All the loans have a five-year maturity from the funding date, will pay an interest rate of 475bp over Libor and have no scheduled principal amortisation.
Orbcomm said that the initial term loan will be used to repay in full the US$45m of 9.5% senior secured notes, due 2018, that the company borrowed from AIG Asset Management at the start of 2013. The balance will be used for general corporate purposes.
The acquisition facilities comprise an initial loan of up to US$10m, which may be used to finance a potential acquisition, and additional loans of up to US$70m to fund an additional potential acquisition.
Commenting on the transaction, Orbcomm CEO Marc Eisenberg said: “We continue to benefit from our enhanced credit profile to both improve our balance sheet and facilitate our growth strategy, which may include new services, product offerings, geographic distribution and potential acquisitions.”
Raymond James provided financial advice and Milbank, Tweed, Hadley & McCloy legal advice to Orbcomm on the financing.
Orbcomm has made a series of bolt-on vertical acquisitions over the past-couple of years and, at the beginning of 2014, raised US$37m in a share offering to fund the purchase of Dutch transportation temperature monitoring firm Euroscan.
In an interview with SatelliteFinance in June, Eisenberg said the company had a build, buy or partner strategy and that it would continue to play an active role in the ongoing consolidation of the M2M distributor market.
