Casa Systems Announces Execution of Transaction Support Agreement to Extend Term Loan B (“TLB”) Debt Maturity to December 2027, with Additional Debt Paydown and Further Favorable De-Levering
May 09 2023 - 4:15PM
Casa Systems, Inc. (NASDAQ: CASA) (“Casa” or “the Company”), a
leading provider of cloud-native software and physical broadband
technology solutions for access, cable, and cloud, today announced
it entered into a Transaction Support Agreement (the “TSA”) with an
ad hoc committee of lenders (the “Consenting Lenders”) representing
approximately 60% of the approximately $223 million in aggregate
principal amount of the Company’s Term Loan B Senior Secured debt
now outstanding (the “2023 TLB Debt”).
The TSA provides for, among other things, the extension of the
current maturity of the 2023 TLB Debt held by the Consenting
Lenders (approximately $133.9 million), with maturity scheduled for
December 2027, allowing the Company to execute on its previously
announced growth strategy, implement operational efficiencies, and
execute on strategic initiatives. The Consenting Lenders agreed,
subject to certain terms and conditions set forth in the TSA, to
exchange approximately $133.9 million of their existing 2023 TLB
Debt for a newly issued super-priority term loan B (the “2027 TLB
Debt”). The TSA also provides that other holders of the existing
2023 TLB Debt that did not initially sign the TSA may execute a
joinder to the TSA under certain conditions. Any such other holder
that executes a joinder will be required, subject to the same terms
and conditions, to exchange its 2023 TLB Debt for such 2027 TLB
Debt.
Simultaneously with the closing of the transactions contemplated
by the TSA, the Company intends to pay down the 2027 TLB Debt
principal held by the Consenting Lenders by $40 million using
available cash on hand. The transactions contemplated by the TSA
are subject to closing conditions and achieving certain
participation thresholds as set forth therein. Additionally, please
see the Company’s Current Report on Form 8-K that was filed today
with the Securities and Exchange Commission with respect to the TSA
and the 2027 TLB Debt, including for additional information
regarding the economics, covenants, and conditions applicable
thereto.
“We are grateful for the support we received from our 2023 TLB
Debt holders,” said Edward Durkin, Casa Systems’ Chief Financial
Officer and Interim Chief Executive Officer. “We believe the
Consenting Lenders’ support for the TSA demonstrates the financial
community’s confidence in our operating plans and the resiliency of
our business. Our market leading product portfolios for access,
cable, and cloud are as robust as ever, with consistently strong
customer demand across all market segments. After the closing of
the refinancing described in the TSA, we will have significantly
extended the maturity date of our 2023 TLB Debt which we believe
will allow us the time and flexibility to continue with our efforts
to significantly enhance stockholder value, by executing on our
previously announced cash-and-capital efficient growth plans and
our plans to further de-lever.”
The consummation of the transactions contemplated by the TSA
will be conditioned on the satisfaction or waiver of certain
conditions precedent, including finalizing all definitive documents
and completion of satisfactory due diligence by the Consenting
Lenders. The transactions contemplated by the TSA may not be
completed as contemplated, or at all. If the Company is unable to
complete this transaction or any other alternative transactions, on
favorable terms or at all, due to market conditions or otherwise,
its financial condition could be materially adversely affected.
This communication is for informational purposes only and does not
constitute an offer to sell, or a solicitation of an offer to buy,
any security and does not constitute an offer, solicitation, or
sale of any security in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
Sidley Austin LLP is serving as legal counsel to the Company in
connection with the transactions contemplated by the TSA. JPMorgan
Chase Bank, N.A. is serving as lead arranger for such transactions
and is represented by Simpson Thacher & Bartlett LLP.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of The Private Securities Litigation Reform Act of
1995. All statements other than statements of historical fact
contained in this press release, including statements regarding the
potential future consummation of the transactions contemplated by
the TSA, business strategy, and plans and objectives for future
operations, are forward-looking statements. The words “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “intend,”
“may,” “are optimistic,” “plan,” “potential,” “predict,” “project,”
“target,” “should,” “will,” “would,” and similar expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. We have
based these forward-looking statements on our current expectations
and projections about future events and financial trends that we
believe may affect our financial condition, results of operations,
business strategy, short-term and long-term business operations and
objectives, and financial needs as of the date of this press
release. A number of important risk factors could cause actual
results to differ materially from the results described, implied or
projected in these forward-looking statements. These factors
include, without limitation: (1) our ability to satisfy the
conditions described in the TSA and to consummate the transactions
contemplated thereby; (2) our ability to fulfill our customers’
orders due to supply chain delays, access to key commodities or
technologies or events that impact our manufacturers or their
suppliers, including the lingering effects of the COVID-19
pandemic; (3) any failure by us to successfully anticipate
technological shifts, market needs and opportunities, and develop
new products and product enhancements that meet those technological
shifts, needs and opportunities; (4) the concentration of a
substantial portion of our revenue in certain customers; (5)
fluctuations in our revenue due to timing of large orders and
seasonality; (6) the length and lack of predictability of our sales
cycle; (7) any difficulties we may face in expanding our platform
into the wireless market; (8) any failure to maintain the synergies
we have realized from our acquisition of NetComm; (9) increases or
decreases in our expenses caused by fluctuations in foreign
currency exchange rates and interest rates; (10) our ability to
effectively transition our chief executive officer role and (11)
other factors discussed in the “Risk Factors” section of our public
reports filed with the Securities and Exchange
Commission (the “SEC”), including our most recent Quarterly
Report on Form 10-Q and our most recent Annual Report on Form 10-K,
which are on file with the SEC and available in the
investor relations section of our website
at http://investors.casa-systems.com and on the SEC’s
website at www.sec.gov. In addition, we operate in a very
competitive and rapidly changing environment. New risks emerge from
time to time. It is not possible for our management to predict all
risks, nor can we assess the impact of all factors on our business
or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in
any forward-looking statements that we may make. In light of these
risks, uncertainties and assumptions, the forward-looking events
and circumstances discussed in this press release are inherently
uncertain and may not occur, and actual results could differ
materially and adversely from those anticipated or implied in the
forward-looking statements. Accordingly, you should not rely upon
forward-looking statements as predictions of future events. We
disclaim any obligation to update publicly or revise any
forward-looking statements for any reason after the date of this
press release. Any reference to our website address in this press
release is intended to be an inactive textual reference only and
not an active hyperlink.
About Casa Systems, Inc.
Casa Systems, Inc. (Nasdaq: CASA) delivers the
core-to-customer building blocks to speed 5G transformation with
future-proof solutions and cutting-edge bandwidth for all access
types. In today’s increasingly personalized world, Casa
Systems creates disruptive architectures built specifically to
meet the needs of service provider networks. Our suite of open,
cloud-native network solutions unlocks new ways for service
providers to build networks without boundaries and maximize
revenue-generating capabilities. Commercially deployed in more than
70 countries, Casa Systems serves over 475 Tier 1 and
regional communications service providers worldwide. For more
information, visit http://www.casa-systems.com.
CONTACT INFORMATION:IR
ContactsDennis DalyCasa Systems978-688-6706 ext.
6310investorrelations@casa-systems.com
or
Mike Cummings or Jackie MarcusAlpha IR
Group617-466-9257 investorrelations@casa-systems.com
Source: Casa Systems
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