£16.7m loan facility and bond repayment

Software Circle (AIM: SFT) is pleased to announce that the Company has entered into new loan facilities of up to £16.7m (the "Facilities") with Shawbrook Bank Limited.

£6.7m of the Facilities will be used to repay, at face value (plus accrued interest and costs), the outstanding bonds in issue from the Company's perpetual bond facility established in July 2020. It is anticipated the bond repayment will occur on or around 25 November 2024.

The remaining £10.0m of the Facilities is structured specifically to enable the Company to continue with its acquisition strategy and is to be utilised by 22 May 2027.

The margin spread over SONIA across the Facilities is in the region of 5%.

The terms of the Facilities include Gross Leverage and Debt Service covenants as follows:

• Gross Leverage, being total debt to EBITDA, not to exceed 3.80:1.00 initially, tapering to 2.50:1:00 by December 2027; and
• Debt service cover, not to be less than 1.10:1.00 during the term of the Facilities.

50% of the funds drawn under the Facilities to repay the bonds is repayable in 60 equal instalments, commencing on 22 December 2024. In addition, following the end of the utilisation period on 22 May 2027, 25% of the additional funds drawn will be repayable in 30 equal instalments, commencing on 22 June 2027. Any outstanding amount under the Facilities is repayable in one instalment on 22 November 2029.

The Facilities have customary arrangement, non-utilisation and early repayment fees.

Gavin Cockerill, CEO of Software Circle, commented: "Our M&A pipeline remains healthy. We intend to deploy our currently available capital before utilising the debt facility which further extends our financial runway, enabling us to pursue additional M&A opportunities. We are committed to maintaining our disciplined approach to acquisitions, ensuring that each addition is aligned with our culture, enhances our overall value proposition, supports our long-term objectives including our primary financial goal of maximising Operating Cash Flow Per Share."

The Company also announces that it intends to release its interim results for the six months to 30 September 2024 on 5 December 2024.