DMC Global Inc. Announces Amendments to Credit Agreement Enhances Financial Flexibility

Published: 2025-06-11 09:20:39 ET BOOM

Published on 06/11/2025 at 09:20

On June 10, 2025, DMC Global Inc. and certain domestic subsidiaries entered into an amendment (the ?Second Amendment?) to its existing credit agreement with a syndicate of banks, led by KeyBank National Association (the ?Credit Agreement?). The Second Amendment provides for certain changes to the Credit Agreement, including modifications to the Company?s financial covenants and applicable interest rates to accommodate the possible acquisition of the remaining 40% minority interest in Arcadia Products, LLC, a Colorado limited liability company (?Arcadia?), currently 60% owned by the Company. The proceeds of the loans are permitted to be used for working capital, refinancing of indebtedness, other general corporate purposes of the Company, and permitted acquisitions, including the acquisition of the remaining ownership in Arcadia.

Key provisions of Second Amendment include a temporary increase in the Company?s maximum leverage ratio to 3.5x adjusted EBITDA over the trailing 12 months ? up from 3.0x ? should either the put or call option be exercised.

This elevated leverage limit will apply for the first two quarters following payment of the purchase price of the put or call option, followed by a reduction to 3.25x in the third quarter, and a return to 3.0x thereafter. Additionally, proceeds under the existing $50 million delayed draw term loan facility set to expire on February 6, 2026, may now be held (to the extent drawn on such facility prior to expiration) in a restricted account after the expiration of such facility for purposes of paying the purchase price of the put or call option in the future. The obligations under the Credit Agreement remain secured by the assets of the Company, including accounts receivable, inventory, and fixed assets, as well as guarantees and share pledges by the Company and its subsidiaries.