Eckoh's New Financing Marks a Major Milestone Ahead of Acquisition

Eckoh Secures Senior Financing for Acquisition

Eckoh PLC is taking significant strides as a leading provider of secure payment and customer contact solutions. The company has successfully entered into a senior facilities agreement, aimed at financing its acquisition by Eagle UK Bidco Limited, a subsidiary of funds managed by Bridgepoint Advisers II Limited. This agreement is an exciting development amidst ongoing changes within the company.

Details of the Senior Facilities Agreement

The newly established senior facilities agreement is set to replace previous interim arrangements and has been structured with lenders including LGT Private Debt (UK) Limited. Essential components of the agreement include a term loan of £57.5 million along with a multi-currency capex and acquisition facility of £27.5 million. This arrangement is designed to suit the financial needs of Eckoh as it navigates its acquisition journey.

Timeline and Approval Process

The acquisition process gained momentum as Eckoh shareholders expressed their support by approving the scheme of arrangement during a court meeting and a general meeting. These meetings are pivotal as they align with the requirements set forth under the Companies Act 2006. The court-sanctioned scheme is expected to have its effectiveness reviewed on January 16, 2025, paving the way for the acquisition to be finalized shortly thereafter.

Key Terms of the Financial Arrangement

Among the notable terms of the senior facilities agreement is a starting interest rate margin of 5.75% per annum, which may adjust according to the company’s net leverage ratio. The agreement also includes standard representations, warranties, and undertakings, alongside provisions related to events of default that are customary in finance deals. These aspects ensure that the financial structure remains solid while supporting Eckoh’s strategic goals.

The Path Forward for Eckoh and Bidco

The completion of the acquisition is contingent upon the fulfillment of remaining conditions detailed within the scheme document. Once these conditions are met, a prompt announcement will be made to shareholders, reflecting the company's progress. This acquisition is poised to be a notable development for both Eckoh and Bidco, and its successful execution could lead to enhanced capabilities and resources for Eckoh in the evolving payment solutions sector.

Legal Oversight and Future Announcements

The acquisition process is being closely monitored by legal advisors including Cleary Gottlieb Steen & Hamilton LLP for Bidco, along with Mills & Reeve LLP representing Eckoh. Such legal guidance is crucial in navigating the complexities of corporate acquisitions and ensuring compliance with regulatory requirements. A further announcement will affirm any changes and progress as the company moves forward.

Frequently Asked Questions

What is the significance of Eckoh's senior facilities agreement?

The senior facilities agreement provides essential financing for Eckoh's acquisition by Eagle UK Bidco Limited, signifying an important step in the company's growth strategy.

Who are the lenders involved in this agreement?

LGT Private Debt (UK) Limited is one of the lenders participating in the senior facilities agreement, which supports Eckoh's financing needs.

What are the expected outcomes of the acquisition?

The acquisition is expected to enhance Eckoh's capabilities and market position, allowing for better service offerings in secure payment solutions.

When was the scheme of arrangement approved by Eckoh shareholders?

Eckoh shareholders approved the scheme of arrangement during meetings that took place on January 6, 2025, paving the way for the acquisition.

How will the acquisition progress be communicated to shareholders?

Eckoh plans to make a formal announcement to shareholders regarding the status of the acquisition once all conditions are fulfilled.

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