Blackbaud nets $250M incremental term loan A for acquisition of EverFi

Blackbaud Inc. announced Jan. 3 that it acquired EverFi Inc. for approximately $750 million and entered into an incremental amendment for a $250 million term loan and a $185 million draw in its revolving credit facility, according to a company filing.

Pricing for the incremental term loan, which matures in October 2025, is tied to a leverage-based grid of 137.5-250 basis points over the secured overnight financing rate plus a credit spread adjustment of 10 bps for the one-month term Sofr rate, 15 bps for a three-month rate and 25 bps for a six-month rate.

Following this borrowing, the company has $239.5 million of borrowing capacity under the credit agreement. The company entered into its existing credit agreement in October 2020. The existing facility is covered by a net leverage ratio covenant set at 4x and interest coverage ratio covenant set at 2.5x.

The transaction was financed with $450 million in cash and $300 million of Blackbaud common stock. The company expects pro forma net leverage to be approximately 3.4x and expects rapid deleveraging as a result of free cash flow. The deal closed Dec. 31, 2021.

BofA Securities and PNC Capital Markets were lead arrangers on the deal, and BofA Securities is administrative agent.

Blackbaud Inc. provides cloud software solutions to nonprofits, foundations, companies, education institutions, healthcare organizations and other social good entities in the U.S. and internationally.