DDi Corp. Completes $61 Million Preferred Stock Private Placement
Apr 01, 2004
Retires Senior Credit Facility; Enters Into Revolving Credit Facility
DDi Corp. (Nasdaq: DDIC), a provider of technologically advanced engineering and manufacturing services, announced today that the Company has completed a private placement of 1,286,917 shares of preferred stock to certain institutional investors for an aggregate sales price of $61 million, or $47.40 per share, before placement fees and offering expenses.
DDi used the proceeds from the private placement, together with cash on hand to pay off the Dynamic Details senior credit facility.
Each share of preferred stock will initially be convertible into four shares of Common Stock at a conversion price of $11.85 per share, subject to certain anti-dilution and other customary adjustments. The shares of preferred stock bear dividends at the rate of 6% per annum, payable quarterly commencing March 31, 2005. The preferred shares are subject to mandatory redemption in five years, and are subject to earlier redemption at the option of the holder under certain circumstances.
Immediately after paying off the senior credit facility, DDi Corp. and its U.S. and Canadian subsidiaries entered into a three-year, $40,000,000 secured revolving credit facility with General Electric Capital Corporation, which acted as agent and lender. The interest rate at closing is LIBOR plus 4% on LIBOR loans and prime plus 3% for index rate loans. Beginning in the second quarter of 2005, pricing will be based upon the borrowing group's financial performance and will range from LIBOR plus 3 to 4% on LIBOR loans or prime plus 2 to 3% for index rate loans. Availability under the credit facility is based on certain liquidity and borrowing base benchmarks. The credit facility contains standard representations and warranties, covenants and events of default for a facility of this size. At March 31, 2004, Dynamic Details, Incorporated was able to borrow up to approximately $15 million on this facility.
"The successful completion of these financial transactions is another vote of confidence in DDi's business model, technological expertise and management team," commented Bruce McMaster, president and chief executive officer of DDi. "The new borrowing agreement provides us with a lower cost of capital and a more flexible borrowing arrangement, which will allow us to capitalize on the improved business activity and opportunities we are seeing in the PCB marketplace."