CPI Card Group Inc. Announces Pricing of Private Offering of $310 Million of Senior Secured Notes
March 01 2021 - 8:16PM
Business Wire
CPI Card Group Inc. (OTCQX: PMTS; TSX: PMTS) (“CPI” or the
“Company”) today announced the pricing of the previously announced
private offering by its wholly-owned subsidiary, CPI CG Inc. (the
“issuer”), of $310 million aggregate principal amount of its 8.625%
senior secured notes due 2026 (the “notes”) and related guarantees.
The offering is expected to close on March 15, 2021, subject to
customary closing conditions.
The issuer intends to use the net proceeds from the offering,
together with cash on hand and initial borrowings under a $50
million secured asset based revolving credit facility that it
expects to enter into concurrently with the issuance of the notes
(the “ABL revolver”), to repay in full and terminate its existing
credit facilities and to pay related fees and expenses. There is no
assurance that the issuer will be able to enter into the ABL
revolver simultaneously with the issuance of the notes or at
all.
The notes are expected to be general senior secured obligations
of the issuer and guaranteed by the Company and certain of its
current and future wholly-owned domestic subsidiaries (other than
the issuer) that will guarantee the ABL revolver, and will be
secured by substantially all of the assets of the issuer and the
guarantors, subject to customary exceptions.
The notes and related guarantees were offered only to persons
reasonably believed to be qualified institutional buyers in
accordance with Rule 144A under the Securities Act of 1933, as
amended (the “Securities Act”), or outside the United States to
certain non-U.S. persons in compliance with Regulation S under the
Securities Act. The issuance and sale of the notes and related
guarantees have not been, and will not be, registered under the
Securities Act or the securities laws of any state or other
jurisdiction, and the notes and related guarantees may not be
offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the
Securities Act and other applicable securities laws.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the notes and related guarantees.
Offers of the notes and related guarantees were made only by means
of a private offering memorandum, and are not being made to any
person in any jurisdiction in which such offer, sale or
solicitation is unlawful.
Forward-Looking Statements
Certain statements and information in this press release (as
well as information included in other written or oral statements we
make from time to time) may contain or constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements relate to, among other
things, expectations regarding the closing of the offering and the
use of proceeds therefrom and the entry into the new ABL revolver.
These forward-looking statements are based on our current
expectations and beliefs concerning future developments and other
information currently available. Such forward-looking statements,
because they relate to future events, are by their very nature
subject to many important risks and uncertainties that could cause
actual results or other events to differ materially from those
contemplated.
These risks and uncertainties include, but are not limited to:
the potential effects of COVID-19 on our business, including our
supply-chain, customer demand, workforce, operations and ability to
comply with certain covenants in our credit facilities; our lack of
eligibility to participate in government relief programs related to
COVID-19 or inability to realize material benefits from such
programs; our substantial indebtedness, including inability to make
debt service payments or refinance such indebtedness; the
restrictive terms of our credit facilities and covenants of future
agreements governing indebtedness and the resulting restraints on
our ability to pursue our business strategies; our limited ability
to raise capital in the future; a disruption or other failure in
our supply chain; the effects of current or additional U.S.
government tariffs as well as economic downturns or disruptions,
including delays or interruptions in our ability to source raw
materials and components used in our products from foreign
countries; system security risks, data protection breaches and
cyber-attacks; interruptions in our operations, including our IT
systems, or in the operations of the third parties that operate the
data centers or computing infrastructure on which we rely; failure
to comply with regulations, customer contractual requirements and
evolving industry standards regarding consumer privacy and data use
and security; disruptions in production at one or more of our
facilities; our failure to retain our existing customers or
identify and attract new customers; our inability to recruit,
retain and develop qualified personnel, including key personnel;
our inability to adequately protect our trade secrets and
intellectual property rights from misappropriation or infringement
claims and risks related to open source software; defects in our
software; problems in production quality, materials and process; a
loss of market share or a decline in profitability resulting from
competition; our inability to develop, introduce and commercialize
new products; new and developing technologies that make our
existing technology solutions and products obsolete or less
relevant or our failure to introduce new products and services in a
timely manner; costs and impacts to our financial results relating
to the obligatory collection of sales tax and claims for
uncollected sales tax in states that impose sales tax collection
requirements on out-of-state businesses, new U.S. tax legislation
increasing the corporate income tax rate and challenges to our
income tax positions; failure to meet the continued listing
standards of the Toronto Stock Exchange or the rules of the OTCQX®
Best Market; a continued decrease in the value of our common stock
combined with our common stock no longer being traded on a United
States national securities exchange, which may prevent investors or
potential investors from investing or achieving a meaningful degree
of liquidity; quarterly variation in our operating results; our
inability to realize the full value of our long-lived assets; our
failure to operate our business in accordance with the Payment Card
Industry (“PCI”) Security Standards Council security standards or
other industry standards; a decline in U.S. and global market and
economic conditions and resulting decreases in consumer and
business spending; costs relating to product defects and any
related product liability and/or warranty claims; our dependence on
licensing arrangements; risks associated with international
operations; non-compliance with, and changes in, laws in the United
States and in foreign jurisdictions in which we operate and sell
our products and services; the effect of legal and regulatory
proceedings; our ability to comply with a wide variety of
environmental, health and safety laws and regulations and the
exposure to liability for any failure to comply; risks associated
with the controlling stockholders’ ownership of our stock; the
influence of securities analysts over the trading market for and
price of our common stock; our inability to sell, exit, reconfigure
or consolidate businesses or facilities that no longer meet with
our strategy; potential conflicts of interest that may arise due to
our board of directors being comprised in part of directors who are
principals of our majority stockholders; certain provisions of our
organizational documents and other contractual provisions that may
delay or prevent a change in control and make it difficult for
stockholders other than our majority stockholders to change the
composition of our board of directors; and other risks that are
described in the “Risk Factors” section of our Annual Report on
Form 10-K for the year ended December 31, 2020 and in our other
reports filed from time to time with the Securities and Exchange
Commission.
We caution and advise readers not to place undue reliance on
forward-looking statements, which speak only as of the date hereof.
These statements are based on assumptions that may not be realized
and involve risks and uncertainties that could cause actual results
to differ materially from the expectations and beliefs contained
herein. We undertake no obligation to publicly update or revise any
forward-looking statements after the date they are made, whether as
a result of new information, future events or otherwise.
About CPI Card Group Inc.
CPI Card Group® is a payment technology company and leading
provider of credit, debit and prepaid solutions delivered
physically, digitally and on-demand. CPI helps our customers foster
connections and build their brands through innovative and reliable
solutions, including financial payment cards, personalization and
Software-as-a-Service (SaaS) instant issuance. CPI has more than 20
years of experience in the payments market and is a trusted partner
to financial institutions and payments services providers. Serving
customers from locations throughout the United States, CPI has a
large network of high security facilities, each of which is
registered as PCI compliant by one or more of the payment brands:
Visa, Mastercard®, American Express® and Discover®.
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Card Group Inc. Media Relations:
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