Alliance Entertainment Secures $120 Million Credit Line for Growth
Alliance Entertainment Secures $120 Million Credit Facility
Alliance Entertainment Holding Corporation (NASDAQ: AENT), a leading distributor and omnichannel fulfillment partner within the entertainment and pop culture collectibles sector, recently concluded an agreement for a significant new credit facility with Bank of America. The $120 million senior secured revolving credit facility is designed to bolster the company's financial flexibility, supporting its operational and growth strategies.
Enhancing Financial Stability
This facility is set to replace Alliance's previous asset-based lending arrangement. The transition aims to enhance the company's liquidity and working capital capabilities. With the closing date on the first of October, the company starts with a loan balance of $68.5 million and maintains total undrawn availability of $51.5 million.
Key Terms of the Credit Facility
The credit facility includes several essential terms designed to provide Alliance Entertainment with a clear pathway for financial management. It comes with a five-year term and an interest rate indexed to SOFR, starting at SOFR plus 150 basis points. This structure not only provides competitive interest rates but also reflects the company’s growth and strengthening business model.
Leadership Perspectives on the New Facility
Bruce Ogilvie, the Executive Chairman of Alliance Entertainment, expressed enthusiasm about the new facility, indicating that it enhances the company's balance sheet and offers the flexibility needed to execute their strategic vision. Ogilvie noted that by focusing on scalability, exclusive content, and operational efficiency, Alliance has solidified its position within the physical media and collectibles market.
Commitment to Growth
Amanda Gnecco, the Chief Financial Officer, shared her insights, highlighting how this credit facility reflects Bank of America's trust in Alliance's operational model and margin enhancement strategies. Gnecco emphasized that this liquidity will facilitate the company’s ongoing growth initiatives while upholding capital discipline.
Expressions of Gratitude
Jeff Walker, the Chief Executive Officer, took a moment to thank White Oak Commercial Finance, the previous credit facility provider, for their partnership over the past 21 months. He acknowledged their support in executing strategies that have laid a solid foundation for future endeavors.
About Alliance Entertainment
Alliance Entertainment (NASDAQ: AENT) stands out as a leading distributor and fulfillment partner within the entertainment and collectibles landscape. The company boasts more than 340,000 unique SKUs, including over 57,300 exclusive titles across various categories such as compact discs, vinyl, DVDs, and video games.
With an extensive catalog that encompasses not just physical media but also licensed merchandise and collectibles, Alliance serves over 35,000 retail locations, enhancing their e-commerce capabilities for top retailers. The company’s unique collectibles portfolio features popular lines such as Handmade by Robots™, showcasing beloved characters from well-known franchises.
Future Outlook
With this new credit facility, Alliance Entertainment is poised to further elevate its position in the entertainment sector, leveraging extensive operational expertise and exclusive licensing partnerships. The company is set to continue connecting collectors and fans with products, ensuring they have access to the franchises and experiences they cherish.
Frequently Asked Questions
What is the total amount of the new credit facility announced by Alliance Entertainment?
The new credit facility totals $120 million, enhancing the company's financial flexibility.
Who is the financial partner for this new credit facility?
Bank of America is the financial partner providing the new credit facility to Alliance Entertainment.
What will the funds from the credit facility be used for?
The funds will support operational needs, growth initiatives, and working capital requirements for Alliance Entertainment.
How does this credit facility affect Alliance's balance sheet?
This facility strengthens Alliance's balance sheet, allowing for improved liquidity and operational flexibility.
What are the strategic goals of Alliance Entertainment with this new facility?
Alliance aims to enhance its growth strategies while maintaining capital discipline and operational efficiency.
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