MINNEAPOLIS - Deluxe Corporation (NYSE: NYSE:DLX), a company specializing in trusted payments and data, announced its intention to offer $400 million in senior secured notes due in 2029. This private placement targets qualified institutional buyers under Rule 144A of the Securities Act of 1933, as well as non-U.S. persons in compliance with Regulation S under the same act.
The proceeds from this offering, combined with borrowings under new senior secured credit facilities, are earmarked for refinancing existing credit agreements. Specifically, the funds will be used to refinance the company's term A loan facility and its revolving credit facility, as well as to cover transaction fees and expenses. Deluxe's plans include a restatement and amendment of its current credit agreement to establish new senior secured credit facilities, consisting of a $400 million revolving credit facility and a $500 million term A loan facility.
The offering is contingent upon the successful closing of the aforementioned credit facilities amendment and restatement. It is important to note that the notes, along with related guarantees, have not been registered under the Securities Act or any state securities laws. Consequently, they cannot be offered or sold within the United States without registration or an applicable exemption from these requirements.
Deluxe, with a history spanning over a century, supports businesses through payment and data solutions, facilitating over $2 trillion in annual payment volume. The company serves a diverse clientele, including small businesses, major financial institutions, and large consumer brands.
This press release is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy the notes or any other securities. There will be no sale of the notes in any jurisdiction where such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
The information in this article is based on a press release statement and does not include any speculative or forward-looking statements about Deluxe Corporation's future performance.
In other recent news, Deluxe Corporation reported its third-quarter earnings for 2024, providing insights into the company's financial performance and strategic expectations for the future. The earnings call, hosted by Vice President of Strategy and Investor Relations Brian Anderson, and attended by President and CEO Barry McCarthy and CFO Chip Zint, discussed non-GAAP financial measures and forward-looking statements. The management team expressed confidence in the company's strategy and future performance metrics, but acknowledged that actual results may vary due to certain factors. These factors, which could cause outcomes to differ from projections, are detailed in Deluxe's SEC filings and recent press release. In a Q&A session following the prepared remarks, no specific financial misses were discussed. These developments are part of the company's recent activities and indicate its commitment to transparency and strategic planning.
InvestingPro Insights
As Deluxe Corporation (NYSE: DLX) moves forward with its $400 million senior secured notes offering, investors may find additional context from recent financial data and expert insights valuable. According to InvestingPro, Deluxe boasts a market capitalization of $1.03 billion, reflecting its substantial presence in the payments and data solutions sector.
The company's financial health appears robust, with InvestingPro data showing a gross profit margin of 54.1% for the last twelve months as of Q3 2024. This impressive figure aligns with one of the InvestingPro Tips, which highlights Deluxe's "impressive gross profit margins." Such strong margins could provide the company with financial flexibility as it undertakes this new debt offering and refinancing initiative.
Additionally, Deluxe's dividend policy stands out. The company offers a dividend yield of 5.17%, which is significant in today's market environment. This is complemented by an InvestingPro Tip noting that Deluxe "has maintained dividend payments for 54 consecutive years," underscoring its commitment to shareholder returns even as it manages its debt structure.
For investors considering Deluxe's long-term prospects, it's worth noting that the company's P/E ratio (adjusted) stands at 12.37 for the last twelve months as of Q3 2024. This relatively modest valuation could be attractive, especially given another InvestingPro Tip suggesting that Deluxe is "trading at a low P/E ratio relative to near-term earnings growth."
These insights offer a broader perspective on Deluxe's financial position as it undertakes this significant refinancing move. Investors seeking a more comprehensive analysis can access additional tips and data through InvestingPro, which offers 11 more tips for Deluxe Corporation.
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