MINNEAPOLIS - Deluxe Corporation (NYSE: NYSE:DLX), a company specializing in payments and data services, has upsized its offering of senior secured notes from $400 million to $450 million, with an interest rate of 8.125% per annum, due in 2029. The offering is scheduled to close on December 3, 2024, pending customary closing conditions.
The proceeds from the sale of the notes, along with borrowings under new senior secured credit facilities, are intended to refinance existing credit facilities and cover transaction fees and expenses. Specifically, the funds will be used to refinance the company’s term A loan facility and its revolving credit facility.
Deluxe's new credit agreement is set to include a revolving credit facility of $400 million and a term A loan facility of $500 million, both maturing on February 1, 2029. Interest rates on the new senior secured credit facilities will be based on adjusted SOFR with a credit spread adjustment, plus an additional percentage that varies with the company's leverage ratio.
The notes, which are being offered in a private placement to qualified institutional buyers and to persons outside the United States, will not be registered under the Securities Act of 1933 or any state securities laws, and therefore cannot be offered or sold within the United States without registration or an exemption from registration requirements.
Deluxe Corporation, with over a century of operation, provides payment and data solutions to support small businesses, financial institutions, and large consumer brands, processing over $2 trillion in annual payment volume.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and such statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations. Factors that may influence Deluxe Corporation's performance include economic conditions, legislative and regulatory actions, cost increases, strategies for revenue and earnings growth, competition, and risks related to acquisitions and technology development.
The information provided in this article is based on a press release statement from Deluxe Corporation.
In other recent news, Deluxe Corporation announced its intention to offer $400 million in senior secured notes due in 2029. The proceeds from this offering, along with borrowings under new senior secured credit facilities, are planned for refinancing existing credit agreements. This includes a restatement and amendment of Deluxe's current credit agreement to establish new senior secured credit facilities.
In more recent developments, Deluxe Corporation reported its third-quarter earnings for 2024. The earnings call, hosted by Vice President of Strategy and Investor Relations Brian Anderson, and attended by President and CEO Barry McCarthy and CFO Chip Zint, discussed non-GAAP financial measures and forward-looking statements. The management team expressed confidence in the company's strategy and future performance metrics, acknowledging that actual results may vary due to certain factors.
These developments indicate Deluxe's commitment to transparency and strategic planning. However, the offering of notes is contingent upon the successful closing of the credit facilities amendment and restatement, and the notes cannot be offered or sold within the United States without registration or an applicable exemption from these requirements.
InvestingPro Insights
As Deluxe Corporation (NYSE: DLX) moves forward with its upsized offering of senior secured notes, investors may find additional context from recent financial metrics and expert insights valuable. According to InvestingPro data, Deluxe has a market capitalization of $1.01 billion and boasts a price-to-earnings (P/E) ratio of 18.36, which adjusts to 12.13 for the last twelve months as of Q3 2024.
Notably, Deluxe demonstrates strong profitability metrics that align with its long-standing business model. The company's gross profit margin stands at an impressive 54.1% for the last twelve months, underscoring its ability to maintain healthy margins in its payments and data services operations. This is particularly relevant given the company's move to refinance its debt, as it suggests a solid financial foundation to support these new obligations.
InvestingPro Tips highlight that Deluxe has maintained dividend payments for 54 consecutive years, reflecting a commitment to shareholder returns that complements its debt management strategy. The current dividend yield of 5.19% may be attractive to income-focused investors, especially in light of the company's long-term dividend consistency.
Furthermore, Deluxe has shown strong recent performance, with a 20.11% price return over the last month and a 17.7% return over the last three months. This positive momentum could indicate market confidence in the company's financial decisions, including the recent note offering.
For those interested in a deeper analysis, InvestingPro offers 11 additional tips for Deluxe Corporation, providing a more comprehensive view of the company's financial health and market position.
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