/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES
OR DISSEMINATION IN THE UNITED
STATES/
BRAMPTON, ON, Feb. 22, 2017 /CNW/ - DATA Communications
Management Corp. (TSX: DCM)("DATA" or the "Company") announced
today that it has closed the previously announced acquisitions of
Eclipse Colour & Imaging Corp. ("Eclipse") and Thistle Printing
Limited ("Thistle"). DATA also announced that it has
increased the total available commitment under its senior revolving
credit facility with a Canadian chartered bank by $10 million to up to $35
million and completed an amendment to its term facility with
the Integrated Private Debt ("IPD") division of Integrated Asset
Management Corp. (TSX:IAM) which provides DATA with a total
borrowing base of up to $72 million
from $50 million.
Acquisition of Eclipse Colour & Imaging Corp.
Eclipse is a leading Canadian large-format and point-of-purchase
printing and packaging company, with approximately 100 employees
operating in an 80,000 square foot facility located in Burlington, Ontario. The acquisition of
Eclipse adds significantly expanded wide format, large format, and
grand format printing capabilities to DATA's portfolio of products
and services, with Eclipse having a product mix focused on in-store
print, outdoor, transit, display, packaging, kitting and fulfilment
capabilities. With the completion of this transaction, DATA
intends to relocate its current wide format capabilities from its
Ambassador Road, Mississauga,
Ontario facility to Calgary, Alberta. The combined wide
format printing, distribution and fulfilment capabilities of
Eclipse and DATA provide a unique national offering in the market
to better serve the combined businesses' customer base.
Acquisition of Thistle Printing Limited
Thistle is a full service commercial printing company with
approximately 65 employees operating in a 42,000 square foot
facility located in Toronto,
Ontario. The acquisition of Thistle provides DATA with a full
service commercial print facility in Eastern Canada and enables DATA to expand its
margins by insourcing commercial printing capabilities, which it
has historically outsourced to local tier two suppliers. This
acquisition adds expertise in commercial printing, design, prepress
and bindery services to DATA's portfolio, and complements DATA's
current capabilities in direct mail, fulfilment and data
management.
Acquisition Funding and Overview
DATA acquired substantially all of the assets of Eclipse for a
net purchase price of approximately $9.2
million, which was satisfied as to approximately:
$3.5 million paid in cash on closing;
$1.3 million through the issuance of
634,263 common shares of DATA; and $4.6
million in the form of a non-interest bearing vendor take
back note, which is payable in two equal instalments on the first
and second anniversaries of today's closing of the Eclipse
transaction. The purchase price is subject to certain
post-closing adjustments relating to working capital.
DATA acquired the common shares of Thistle for a net purchase
price of approximately $6.1 million,
which has been satisfied as to approximately: $1.1 million paid in cash on closing;
$1.5 million through the issuance of
644,445 common shares of DATA; and $3.6
million in the form of a non-interest bearing vendor take
back note, payable over a 24 month period in equal monthly
payments. The purchase price is subject to certain
post-closing adjustments relating to working capital.
In aggregate, a total of 1,278,708 common shares of DATA have
been issued to the vendors of Eclipse and Thistle and, as a result,
after having completed both transactions, the number of DATA's
issued and outstanding common shares has increased from 11,975,053
to 13,253,761.
Increase in Senior Credit Facilities and Amendment to
Existing Terms
In connection with the acquisitions of Eclipse and Thistle, DATA
has entered into an amended senior revolving credit facility with a
Canadian chartered bank, including an increase in the total
available commitment under that facility from up to $25 million to up to $35
million and the extension of the term of this facility by
one year to March 31, 2020 from
March 11, 2019. The revolving
credit facility includes a sub-facility comprised of a term loan
component of up to $7 million, an
increase from the original sub-facility term loan component of
$5 million. The term loan
component will amortize in equal monthly payments over the new term
of the revolver but those payments will not reduce the amount
available under the revolving facility.
DATA has also entered into an amended term loan agreement with
Integrated Private Debt Fund IV LP ("IPD IV"), by its general
partner, Integrated Private Debt Fund GP Inc. ("IPD GP"), which,
among other things, provides that senior funded debt of DATA may
not exceed $72 million, an increase
from $50 million in the original IPD
IV term facility dated March 10,
2016. Integrated Private Debt Fund III LP is a senior
secured lender to Thistle.
The increased availability under the senior revolving credit
facility has been used, together with the additional availability
under the sub-facility term loan, to refinance certain indebtedness
of Eclipse and Thistle and to finance the up-front cash components
of the acquisitions together with related transaction expenses, and
will provide DATA with additional flexibility to continue to pursue
its strategic growth objectives. In connection with these two
acquisitions, DATA's indebtedness has increased by approximately
$16.3 million, including assumed
indebtedness of Eclipse and Thistle.
In addition, DATA has entered into an amended inter-creditor
agreement between a Canadian chartered bank, Integrated Private
Debt Fund IV LP, Integrated Private Debt Fund III LP and the
parties to the vendor take back notes issued in connection with the
acquisitions of Eclipse and Thistle.
About DATA Communications Management Corp.
At DATA, we
are experts at planning and driving business communications. We
help marketers and agencies unify and execute communications
campaigns across multiple channels, and we help operations teams
streamline and automate document and communications management
processes.
Our core capabilities include direct marketing, print services,
labels and asset tracking, event tickets and gift cards, logistics
and fulfilment, content and workflow management, data management
and analytics, and regulatory communications. We serve clients in
key vertical markets such as financial services, retail,
healthcare, lottery and gaming, not-for-profit, and energy. We are
strategically located across Canada to support clients on a national basis,
and serve the U.S. market through our facilities in Chicago, Illinois.
Additional information relating to DATA Communications
Management Corp. is available on www.datacm.com, and in the
disclosure documents filed by DATA Communications Management Corp.
on the System for Electronic Document Analysis and Retrieval
(SEDAR) at www.sedar.com.
FORWARD-LOOKING STATEMENTS
Certain statements in this
press release constitute "forward-looking" statements that involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance, objectives or achievements
of DATA, or industry results, to be materially different from any
future results, performance, objectives or achievements expressed
or implied by such forward-looking statements. When used in this
press release, words such as "may", "would", "could", "will",
"expect", "anticipate", "estimate", "believe", "intend", "plan",
and other similar expressions are intended to identify
forward-looking statements. These statements reflect DATA's current
views regarding future events and operating performance, are based
on information currently available to DATA, and speak only as of
the date of this press release. These forward-looking
statements involve a number of risks, uncertainties and assumptions
and should not be read as guarantees of future performance or
results, and will not necessarily be accurate indications of
whether or not such performance or results will be achieved.
Many factors could cause the actual results, performance,
objectives or achievements of DATA to be materially different from
any future results, performance, objectives or achievements that
may be expressed or implied by such forward-looking statements. The
principal factors, assumptions and risks that DATA made or took
into account in the preparation of these forward-looking statements
include: the failure to realize the expected benefits from
either the Eclipse or Thistle transaction, risks associated with
the integration of either Eclipse or Thistle and with additional
indebtedness assumed in connection with the acquisitions of Eclipse
and Thistle; the limited growth in the traditional printing
industry and the potential for further declines in sales of DATA's
printed business documents relative to historical sales levels for
those products; the risk that changes in the mix of products and
services sold by DATA which are related to reduced demand for its
printed products will adversely affect DATA's financial results;
the risk that DATA may not be successful in reducing the size of
its legacy print business, reducing costs, reducing its long-term
debt, repaying or refinancing its outstanding 6.00% convertible
unsecured subordinated debentures, and growing its digital
communications business; the risk that DATA may not be successful
in managing its organic growth, or implementing its restructuring
activities within expected timeframes and related cost estimates;
DATA's ability to invest in, develop and successfully market new
digital and other products and services; competition from
competitors supplying similar products and services, some of whom
have greater economic resources than DATA and are well-established
suppliers; DATA's ability to grow its sales or even maintain
historical levels of its sales of printed business documents; the
impact of economic conditions on DATA's businesses; risks
associated with the management of and successful integration of
acquisitions by DATA; increases in the costs of paper and other raw
materials used by DATA; and DATA's ability to maintain
relationships with its customers. Additional factors are discussed
elsewhere in this press release and under the headings "Risk
Factors" and "Risks and Uncertainties" in DATA's management's
discussion and analysis and in DATA's other publicly available
disclosure documents, as filed by DATA on SEDAR (www.sedar.com).
Should one or more of these risks or uncertainties
materialize, or should assumptions underlying the forward-looking
statements prove incorrect, actual results may vary materially from
those described in this press release as intended, planned,
anticipated, believed, estimated or expected. Unless required
by applicable securities law, DATA does not intend and does not
assume any obligation to update these forward-looking
statements.
SOURCE DATA Communications Management Corp.