New Facility Represents Strategic Investment by
Francisco Partners; Proceeds Will Fund $60 Million Share Repurchase
and Cash Portion of the Exchange of $404 Million Convertible
Debt
8x8, Inc. (NYSE: EGHT) (the “Company” or “8x8”), a leading
integrated cloud communications platform provider, today announced
a new $250 million senior secured term loan facility in a
transaction led by Francisco Partners. Under the credit agreement,
the Company intends to use the facility to fund the cash portion of
an exchange of approximately $404 million principal amount of the
Company’s 0.50% convertible notes due 2024 and the concurrent
repurchase of approximately $60 million of the Company’s common
stock.
“We are excited to partner with 8x8 by providing a customized
capital solution,” said Scott Eisenberg, Head of Credit and
Structured Solutions at Francisco Partners. “8x8 is a leader in the
large and growing cloud communications market and we look forward
to supporting management by helping advance their vision for the
business and drive value for all stakeholders.”
“Francisco Partners’ commitment of capital to 8x8 recognizes the
opportunity and importance of our XCaaS vision to deliver a
single-vendor cloud communications and contact center solution that
empowers workers in today’s hybrid workplaces,” said Samuel Wilson,
8x8 Chief Financial Officer. “By simultaneously executing a term
loan, convertible debt exchange, and share repurchase, we extend
the maturity of more than 80 percent of our 2024 convertible debt
while limiting the potential dilutive impact to existing
shareholders. Our continued focus on operational efficiency was a
key factor in negotiating favorable terms for these transactions.
Consistent with the increased emphasis on profitability and cash
flow generation we communicated with our fiscal first quarter
earnings release, we reiterate our recently communicated goals of
remaining operating cash flow positive and generating an operating
profit on a non-GAAP basis.”
Term Loan Facility Details
The term loan facility will mature in July 2027. Advances under
the term loan facility will bear interest at an annual rate equal
to the Term Secured Overnight Financing Rate (SOFR), plus a margin
of 6.50%, subject to a floor of 1.00% and a credit spread
adjustment of 0.10%. Wilmington Savings Fund Society, FSB will
serve as administrative agent, with certain affiliates of Francisco
Partners as lenders (the “Credit Agreement”).
In conjunction with the term loan facility, the Company also
issued detachable warrants exercisable for an aggregate of 3.1
million shares of the Company’s common stock to Francisco Partners
and its affiliates. The warrants carry a five-year term and an
exercise price equal to $7.15, representing a 27.5% premium over
the closing price of the Company’s common stock on August 3, 2022,
the pricing date.
Loans under the Credit Agreement contain customary financial
covenants as well as affirmative and negative covenants customary
for transactions of this type, including minimum liquidity and
limitations with respect to indebtedness, liens, investments,
dividends, disposition of assets, change in business and
transactions with affiliates.
The Credit Agreement will be guaranteed by certain of the
Company’s wholly-owned subsidiaries, other than immaterial
subsidiaries and other customary exceptions, and secured by a
perfected security interest in substantially all of the Company’s
tangible and intangible assets, as well as substantially all of the
tangible and intangible assets of the guarantors.
The initial funding of loans under the Credit Agreement is
expected to occur on August 10, 2022, subject to customary closing
conditions.
J. Wood Capital Advisors LLC acted as financial advisor and
Skadden, Arps, Slate, Meagher & Flom LLP served as legal
advisor to the Company on the transaction.
About 8x8 Inc.
8x8, Inc. (NYSE: EGHT) is transforming the future of business
communications as a leading Software as a Service provider of 8x8
XCaaS™ (eXperience Communications as a Service™), an integrated
contact center, voice communications, video, chat, and API built on
one global cloud communications platform. 8x8 uniquely eliminates
the silos between Unified Communications as a Service (UCaaS) and
Contact Center as a Service (CCaaS) to power the communications
requirements of all employees globally as they work together to
deliver differentiated customer experiences. For additional
information, visit www.8x8.com, or follow 8x8 on LinkedIn, Twitter
and Facebook.
8x8®, 8x8 XCaaS™, eXperience Communications as a Service™,
eXperience Communications Platform™ are trademarks of 8x8, Inc.
Forward-Looking Statements
This news release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995
and Section 21E of the Securities Exchange Act of 1934. Any
statements that are not statements of historical fact may be deemed
to be forward-looking statements. For example, words such as "may,"
"will," "should," "estimates," "predicts," "potential," "continue,"
"strategy," "believes," "anticipates," "plans," "expects,"
"intends," and similar expressions are intended to identify
forward-looking statements. These forward-looking statements,
include but are not limited to the Company's ability to close the
foregoing transactions on the timeline described, with the terms
anticipated, or at all and whether the Company remains cash flow
positive and profitable on a non-GAAP basis. Actual results could
differ materially from those projected in forward-looking
statements depending on a variety of factors. These include that
the closing of the transactions is subject to closing conditions.
For a discussion of such risks and uncertainties, which could cause
actual results to differ from those contained in the
forward-looking statements, see "Risk Factors" in the Company's
reports on Forms 10-K and 10-Q, as well as other reports that 8x8
files from time to time with the Securities and Exchange
Commission. All forward-looking statements are qualified in their
entirety by this cautionary statement, and 8x8 undertakes no
obligation to update publicly any forward-looking statement for any
reason, except as required by law, even as new information becomes
available or other events occur in the future.
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version on businesswire.com: https://www.businesswire.com/news/home/20220803006069/en/
8x8, Inc. Contacts: Investor Relations: Kate Patterson,
1-408-763-8175 katherine.patterson@8x8.com
Media: John Sun, 1-408-692-7054 john.sun@8x8.com
Francisco Partners Contact: Whit Clay, 1-212-446-1864
wclay@sloanepr.com
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