US VoIP services provider Vonage has secured a US$225m four-year credit facility as it looks for acquisition opportunities to gain scale.
The debt comprises a US$100m senior secured term loan bearing interest at LIBOR plus 3.125%, and a US$125m…
US VoIP services provider Vonage has secured a US$225m four-year credit facility as it looks for acquisition opportunities to gain scale.
The debt comprises a US$100m senior secured term loan bearing interest at LIBOR plus 3.125%, and a US$125m revolving credit facility.
Vonage said US$90m of the proceeds were used to retire all the debt sitting under an existing facility secured last year.
“The 2014 credit facility provides greater flexibility to us in funding acquisitions and restricted payments, such as stock buybacks, than the 2013 facility,” it said in a regulatory filing.
The lenders on the new debt are JP Morgan, which also acted as administrative agent, Citizens Bank, Silicon Valley Bank, SunTrust Bank, Fifth Third Bank, Keybank National Association and MUFG Union Bank.
It can be upsized by up to US$60m plus an amount equal to the repayments of the term loan, subject to certain restrictions.
It also comes with covenants which include a requirement for Vonage to ensure its consolidated leverage ratio is no greater than 2.25 times.
New York-listed Vonage has roughly 2.4 million customers and is headquartered in Holmdel, New Jersey.
It recently posted adjusted EBITDA up 7.41% to US$29m for the three months to the end of June 2014, compared with US$27m for the corresponding period last year.
Q2 2014 revenue increased 6.83% year on year to US$219m, which the group attributed to its 2013 acquisition of smaller rival Vocalocity.
