Data Communications Management Corp T.DCM

New Press Release - DATA Communications Management Corp. Announces C$25,000,000 Marketed Private Placement Offering

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATESBRAMPTON, Ontario, May 02, 2023 (GLOBE NEWSWIRE) -- DATA Communications Management Corp. (TSX: DCM; OTCQX: DCMDF) (“DCM”...read article.

[lscfa]

So mgmt was wrong about financing the entire RRD acquisition with debt.... "DCM intends to finance 100 percent of the purchase price in cash through fully committed credit facilities from a Canadian Chartered Bank and Fiera Private Debt."

[lscfa]

    Before acq. Add RRD After acq. Synergies After synergies Shs 44,062,831 10,000,000 54,062,831   54,062,831 Sh price

[lscfa]

co. had $6 mil of 6.95% term loans come due in March/May.... Has an o/s term loan for $9 mil due May 2024 at 5.95%..... Has $12 mil of floating rate debt with a rate of 9.95% at Dec 31/22.... Co probably got sticker shock when bank set rate for new $93 mil credit facility so decided to raise some equity. The acquistion/equity raise is still accretive, just not as accretive as all debt deal.

[lscfa]

Some math...         Before synergies Before synergies   DCM W/ RRD, all debt  W/ RRD, part debt ebitda 38,254 58,954 58,954

[Torontojay]

The equity raise will almost perfectly cancel out the existing credit facilities, as majority of this will come due by end of 2024 ($17,618k). Total credit facilities = $27,047k with the last tranche of payment due Dec 17,2026.  As of year end, book value was only $22.847m and now increases up to $52.847m.Debt to equity levels are still very high (after acquisition) even with the equity

[KnowledgeSeekr8]

I just think that if this company is growing the way it has been and adding in the RRD acquistions numbers we would have been albe to service and pay down the debt quite easily without this issuance. Now with the increased share count to somewhere around 54 million shares, it will be a much longer road to $5 and a market cap of $250 million I just think this was bad timing unless the Q1 numbers

[lscfa]

AGM Jun 15,,,,vote your disgust

[lscfa]

Q1 results due May 15.....Why do a financing that spans a reporting period?

[BetSafe]

Q1 Earnings Call will be on Thursday May 11th at 9am EST