KLDiscovery Inc. (“KLDiscovery” or the “Company”), a leading
global provider of electronic discovery, information governance,
and data recovery technology solutions, today announced that it has
closed a value-enhancing deleveraging transaction with its
convertible debenture holders, term loan lenders, revolving credit
facility lender, and largest shareholder. This strategic step
significantly reduces the Company’s long-term debt and strengthens
its financial position, further enhancing KLDiscovery’s ability to
deliver for its clients and partners.
“The successful completion of this transaction marks a
significant milestone in KLDiscovery’s journey to help our clients
solve their most complex data challenges. With the new capital
structure now in place, the Company is well-positioned to reach new
heights and continue delivering innovative solutions for our
customers,” said Chris Weiler, Chief Executive Officer of
KLDiscovery. “I extend my sincere appreciation to our capital
partners for their steadfast support along the way. We are excited
to leverage this momentum in collaboration with our team, driving
forward our vision to solidify KLDiscovery’s leadership in the
eDiscovery space.”
As contemplated by the previously announced transaction
agreements, KLDiscovery’s outstanding convertible notes have been
cancelled and exchanged for new shares representing approximately
96% of the Company’s outstanding common equity and the maturity of
the Company’s term loan has been extended to August 2027. In
addition, at the closing of the transaction, KLDiscovery received
$50 million of second lien secured financing which was used to
repay a portion of the Company’s first lien secured debt, a portion
of the amounts outstanding under the revolver, and pay transaction
expenses. The closing of this transaction reflects the continued
strong support of KLDiscovery’s capital partners, who are confident
in the Company’s prospects and business strategy.
Kevin Griffin, Chief Executive Officer & Chief Investment
Officer of debenture holder MGG Investment Group, said,
“KLDiscovery is on a strong trajectory with enhanced financial
flexibility. We are confident in KLDiscovery’s innovative
technology, dedicated team, and business strategy, and look forward
to the Company’s continued growth and evolution.”
Advisors
Gibson, Dunn & Crutcher LLP served as legal counsel,
Guggenheim Securities, LLC and AlixPartners served as financial
advisors, and C Street Advisory Group served as strategic
communications advisor to the Company.
Morrison & Foerster LLP served as legal counsel and Lazard
served as investment banker to the debenture holders.
About KLDiscovery
KLDiscovery provides technology-enabled services and software to
help law firms, corporations, and government agencies solve complex
data challenges. With offices in 26 locations across 17 countries,
KLDiscovery is a global leader in delivering best-in-class data
management, information governance, and eDiscovery solutions to
support the litigation, regulatory compliance, and internal
investigation needs of clients. Serving organizations for over 30
years, KLDiscovery offers data collection and forensic
investigation, early case assessment, data processing, application
software and data hosting for web-based document reviews, and
managed document review services. In addition, through its global
Ontrack data management business, KLDiscovery delivers world-class
data recovery, disaster recovery, email extraction and restoration,
data destruction, and tape management. KLDiscovery has been
recognized as one of the fastest growing companies in North America
by both Inc. Magazine (Inc. 5000) and Deloitte (Deloitte’s
Technology Fast 500), and CEO Chris Weiler was a 2014 Ernst &
Young Entrepreneur of the Year™. Additionally, KLDiscovery is a
Relativity Certified Partner and maintains ISO/IEC 27001 Certified
data centers around the world. Visit www.kldiscovery.com to learn
more.
Forward Looking Statements
This press release includes “forward looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, Section 21E of the Securities Exchange Act of 1934 and the
United States Private Securities Litigation Reform Act of 1995. All
statements contained in this press release other than statements of
historical facts, including, without limitation, statements
regarding the benefits of the transaction, the Company's leadership
in the eDiscovery space, the support of the Company's capital
partners, the Company’s ability to deliver innovative solutions,
and Company growth and evolution, are forward-looking statements.
When used in this press release, the words “estimated,” “expects,”
“anticipates,” “forecasts,” “believes,” “may,” “will,” “should,”
“future” and variations of these words or similar expressions (or
the negative versions of such words or expressions) are intended to
identify forward-looking statements.
These forward-looking statements are not guarantees of future
performance, conditions, results or events, and involve a number of
known and unknown risks, uncertainties, assumptions and other
important factors, many of which are outside KLDiscovery’s
management’s control, that could cause actual results or outcomes
to differ materially from those discussed in the forward-looking
statements. Important factors, among others, that may affect actual
results or outcomes include: consequences of KLDiscovery’s
substantial levels of indebtedness; KLDiscovery’s potential failure
to comply with privacy and information security regulations
governing the client datasets it processes and stores;
KLDiscovery’s ability to operate in highly competitive markets, and
potential adverse effects of this competition; risk of decreased
revenues if KLDiscovery does not adapt its pricing models; the
ability to attract, motivate and retain qualified employees,
including members of KLDiscovery’s senior management team; the
ability to maintain a high level of client service and expand
operations; potential issues with KLDiscovery’s product offerings
that could cause legal exposure, reputational damage and an
inability to deliver services; KLDiscovery’s ability to develop and
successfully grow revenues from new products such as Nebula,
improve existing products and adapt its business model to keep pace
with industry trends; risk that KLDiscovery’s products and services
fail to interoperate with third-party systems; potential
unavailability of third-party technology that KLDiscovery uses in
its products and services; potential disruption of KLDiscovery’s
products, offerings, website and networks; difficulties resulting
from KLDiscovery’s implementation of new consolidated business
systems; the ability to deliver products and services following a
disaster or business continuity event; disease or similar public
health threat, such as COVID-19; potential unauthorized use of our
products and technology by third parties and/or data security
breaches and other incidents; potential intellectual property
infringement claims; and the ability to comply with various trade
restrictions, such as sanctions and export controls, resulting from
KLDiscovery’s international operations. These risks and other
factors discussed in the “Risk Factors” section of KLDiscovery’s
Annual Report on Form 10-K for the year ended December 31, 2023,
and subsequent Quarterly Reports on Form 10-Q filed with the
Securities Exchange Commission (“SEC”) and any other reports
KLDiscovery files with the SEC, could cause actual results to
differ materially from those expressed or implied by
forward-looking statements made by KLDiscovery or on its behalf.
Given these risks and uncertainties, investors should not place
undue reliance on forward-looking statements as a prediction of
actual results or outcomes. All statements speak only as of the
date made, and unless legally required, KLDiscovery undertakes no
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
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Danny Zambito 888.811.3789 danny.zambito@kldiscovery.com