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Consensus Cloud Solutions , Inc. (NASDAQ:CCSI), a technology company with a market capitalization of $415 million and impressive gross profit margins of nearly 80%, announced Monday it has entered into a new credit agreement with a group of lenders and U.S. Bank National Association as agent. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics and trades at an attractive P/E ratio of 5.2. The agreement, signed July 9, provides the company with a senior secured revolving credit facility of $75 million and a senior secured delayed-draw term loan facility of $150 million, for a total of $225 million. This new facility adds to the company’s existing total debt of $597.5 million, though InvestingPro data shows the company maintains a healthy current ratio of 1.25, indicating solid liquidity management.
According to the company’s statement in the SEC filing, the revolving credit facility allows Consensus Cloud Solutions to borrow, repay, and reborrow funds at any time through July 10, 2028. The delayed-draw term loan facility is available for borrowing until October 15, 2026, but any amounts repaid or prepaid on this portion cannot be reborrowed. As of Monday, no funds had been drawn under the new credit facility.
The company has the option to select either a base rate or the Secured Overnight Financing Rate (SOFR) plus an applicable margin as the interest rate. The margin ranges from 0.50% to 1.25% for base rate loans and from 1.50% to 2.25% for SOFR loans, depending on the total net leverage ratio. Consensus Cloud Solutions expects to draw funds in the last fiscal quarter of 2025, with an anticipated interest rate of SOFR plus a 1.75% margin based on its current leverage.
The credit facility is guaranteed by each wholly-owned material domestic subsidiary of the company and is secured by substantially all assets of the company and the guarantors, subject to customary exceptions. The agreement includes financial covenants tested quarterly, including a maximum total net leverage ratio and a minimum fixed charges coverage ratio. It also restricts certain actions such as paying dividends, making specific restricted payments, creating liens, entering into sale and leaseback transactions, engaging in affiliate transactions, merging or consolidating, incurring additional debt, making acquisitions or investments, and transferring or selling assets.
In connection with the new agreement, the company’s prior senior secured revolving credit facility, also agented by U.S. Bank National Association, was retired with no outstanding balance.
This information is based on a press release statement included in a recent SEC filing.
In other recent news, Consensus Cloud Solutions reported its Q1 2025 earnings, surpassing expectations with an earnings per share (EPS) of $1.37 compared to the forecasted $1.31. The company also slightly exceeded revenue projections, reporting $87.14 million against an anticipated $87.02 million. This performance highlights the company’s ability to manage costs effectively and maintain growth in its core segments. Additionally, Consensus Cloud Solutions has projected full-year 2025 revenue between $343 million and $357 million, with adjusted EPS ranging from $5.30 to $5.42. The company anticipates Q2 2025 revenue to be between $85 million and $89 million, with adjusted EPS between $1.31 and $1.42. Analyst firms, such as BTIG, have shown interest in the company’s growth strategies, particularly in the corporate sector and the expansion of its customer base. Despite a planned reduction in its SOHO channel, Consensus Cloud Solutions continues to focus on corporate growth, with a reported 5.6% increase in corporate revenue year-over-year. The company maintains a strong corporate customer base, which grew by 9% year-over-year, reflecting ongoing strategic efforts to enhance customer engagement and product offerings.
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