Data Communications Management Corp has agreed to acquire Bolder Graphics, a Calgary-based marketing communications specialist. Data, a Brampton, Ontario-based business communication solutions provider, agreed to pay about $4.9 million in cash, a common shares issue, a note, and the assumption of debt. In connection with the acquisition, expected to close next month, Data arranged for a $5 million senior credit facility with IAM Private Debt Group, an affiliate of Canadian alternative asset manager Integrated Asset Management Corp (TSX: IAM).
DATA Communications Management Corp. Announces Strategic Acquisition of BOLDER Graphics and Commitment Letter for a New $5 Million Senior Credit Facility
October 30, 2017
BRAMPTON, Ontario–(BUSINESS WIRE)–DATA Communications Management Corp. (TSX: DCM) (“DATA” or the “Company”) is pleased to announce it has entered into an agreement to acquire privately-held BOLDER Graphics (“BOLDER”) of Calgary, Alberta. DATA also announces it has arranged a new $5 million senior credit facility with Integrated Private Debt Fund V LP, and its general partner, Integrated Private Debt Fund GP Inc. (“IPD”), to help fund the acquisition.
BOLDER is a leading western Canadian marketing communications business, tracing its roots back more than 40 years. Its core capabilities are in large-format digital printing, offering point of sale signage, corporate packaging, outdoor signage and vehicle graphics. BOLDER also specializes in loose-leaf bindery and stationery and other commercial print capabilities. The company has approximately 40 employees operating in a 59,000 square foot facility located in Calgary, Alberta.
BOLDER generated approximately $7 million in revenues (unaudited) for the fiscal year ended January 1, 2017. DATA intends to relocate BOLDER’s staff and operations into DATA’s 165,000 square foot Calgary, Alberta facility, which produces a wide array of sheet-fed lithography, digital and wide format print services, variable print-on-demand solutions and provides warehousing, fulfilment and distribution services.
“We are pleased to welcome the BOLDER family to DATA,” said Michael G. Sifton, CEO of DATA. “BOLDER’s customer base of leading western Canadian retailers and other brands will benefit from our own capabilities in Calgary as well as our national footprint and technology solutions,” he continued. “This acquisition further strengthens our large format presence in the market and is expected to provide immediate synergies when combined with our state-of-the-art Calgary centre of excellence,” he stated.
DATA will acquire BOLDER for a total purchase price of approximately $4.9 million, comprised of $2.0 million payable in cash on closing (net of shareholder loan repayments and transaction expenses), $1.0 million through the issuance of common shares of DATA, $0.9 million in the form of a subordinated, unsecured 6.0% interest-bearing vendor take back note to be payable over a 24 month period, and the assumption of approximately $1.0 million in outstanding long term indebtedness. The purchase price will be subject to certain closing adjustments relating to working capital.
The acquisition will be completed pursuant to a share purchase agreement dated October 27, 2017 (the “SPA”) between DATA and the BOLDER shareholders. The SPA contains customary representations, warranties, covenants and other terms and conditions. DATA has secured lock-up agreements with the vendors, pursuant to which the vendors have agreed not to sell DATA common shares issued pursuant to the sale transaction for a period of twelve months from closing. A total of 704,424 common shares of DATA will be issued to the vendors and the number of DATA’s issued and outstanding common shares will increase from 19,334,735 to 20,039,159 common shares outstanding. The issuance of common shares to the vendors is subject to the approval of the Toronto Stock Exchange.
Kevin McCoy, President & CEO and founder of BOLDER, is expected to remain with the company for approximately six months to assist in transition matters. Dave Watt, Vice President, Sales and Marketing will remain with the company and continue to serve BOLDER’s clients.
Increase in Senior Credit Facilities
In connection with the acquisition, DATA has entered into a commitment letter for a new $5 million senior term credit facility with IPD, of which approximately $2 million will be used to fund the up-front cash component of the BOLDER acquisition and repay shareholder loans, $2.6 million will be used to repay in full the outstanding balance of the term loan sub-facility of the Company’s senior revolving credit facility with a Canadian chartered bank, and the balance will be used for general working capital purposes.
Closing is expected to occur on or about November 10, 2017 and is subject to customary closing conditions.
About DATA Communications Management Corp.
DATA is a leading provider of business communication solutions, bringing value and collaboration to marketing and operation teams across North America. We help marketers and agencies unify and execute communications campaigns across multiple channels, and we help operations teams streamline and automate document and communications management processes. Our core capabilities include direct marketing, print services, labels and asset tracking, event tickets and gift cards, logistics and fulfilment, content and workflow management, data management and analytics, and regulatory communications. We serve clients in key vertical markets such as financial services, retail, healthcare, lottery and gaming, not‐for‐profit, and energy. We are strategically located across Canada to support clients on a national basis, and serve the U.S. market through our facilities in Chicago, Illinois.
Additional information relating to DATA Communications Management Corp. is available on www.datacm.com, and in the disclosure documents filed by DATA Communications Management Corp. on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
DATA Communications Management Corp.
Mr. Michael G. Sifton, 905-791-3151
Chief Executive Officer
Mr. James E. Lorimer, 905-791-3151
Chief Financial Officer
Photo courtesy of Bolder Graphics