DEBT |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||
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| DEBT | 7. DEBT The Company’s debt is summarized as follows:
The Company’s current credit facility (the Existing Credit Facility) includes a $500 million revolving line of credit as well as provisions allowing for the increase of the credit facility commitment amount by an additional $250 million, if necessary, with the consent of the lenders. The bank syndication supporting the facility is comprised of a diverse group of seven banks led by JP Morgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, and Commerce Bank and TD Bank, N.A. as co-documentation agents. The Existing Credit Facility matures August 30, 2028, with balance due by this date. On August 5, 2024, the Company and certain of its subsidiaries entered into Amendment No. 1 to the Existing Credit Facility which, among other things, (i) implemented a senior incremental delayed draw term loan credit facility in an aggregate principal amount of up to $375 million (the Incremental Facility), and (ii) permitted the direct or indirect acquisition by the Registrant or certain of its subsidiaries of all the issued and outstanding shares of PMES I Limited, Measurement Systems, Inc., EMS Development Corporation, and DNE Technologies, Inc. (the Maritime Acquisition). During the third quarter of 2025, the proceeds of the loans drawn under the Incremental Facility were applied to pay a portion of the cash consideration for the Maritime Acquisition and other customary fees, premiums, expenses and costs incurred in connection with the acquisition. The Incremental Facility matures August 30, 2028, with balance due by this date. At June 30, 2026, the Company had approximately $442 million available to borrow under the Existing Credit Facility, plus the $250 million increase option subject to the lenders’ consent, in addition to $73.2 million cash on hand. The Company classified $20 million as the current portion of long-term debt as of June 30, 2026, as the Company intends to repay this amount as obligated by the repayment terms of the Incremental Facility within the next twelve months. The letters of credit issued and outstanding under the Credit Facility totaled $12.7 million at June 30, 2026. Interest on borrowings under the Existing Credit Facility and the Incremental Facility is calculated at a spread ranging from 0.25% to 2.25% over either an Adjusted Term SOFR Rate, Adjusted EURIBOR Rate, Adjusted CDOR Rate, Alternate Base Rate or Daily Simple RFR, at the Company’s election. The Existing Credit Facility also requires a facility fee ranging from 12.5 to 25 basis points per annum. The interest rate spreads and the facility fee are subject to increase or decrease depending on the Company’s leverage ratio. The weighted average interest rates under the Existing Credit Facility were 4.98% and 5.18% for the three and nine-month periods ending June 30, 2026, respectively, and 6.03% and 5.99% for the three- and nine-month periods ending June 30, 2025. The weighted average interest rate under the Incremental Facility was 5.25% and 5.40% for the three and nine-month periods ending June 30, 2026. As of June 30, 2026, the Company was in compliance with all covenants. On May 29, 2026, to finance the Company’s anticipated purchase of Megger Group Limited pursuant to a share purchase agreement entered into on April 15, 2026 (the Transaction), the Company and certain of its subsidiaries entered into a Credit Agreement with JPMorgan Chase Bank, N.A. as administrative agent, Bank of America, N.A. as syndication agent, and a diverse group of other banks (the New Credit Facility). The New Credit Facility will become effective subject to several conditions, including (and substantially concurrently with) the consummation of the Transaction and will replace the Existing Credit Facility on the Transaction closing date (the Effective Date). The New Credit Facility provides for (i) a senior secured revolving credit facility in an initial aggregate commitment amount of $500 million, (ii) a senior secured term loan A facility in an initial aggregate principal amount of $500 million, and (iii) a senior secured term loan B facility in an initial aggregate principal amount of $500 million. Through a credit facility expansion option, the Company may elect to increase the aggregate amount of the revolving credit facility or obtain incremental term loans in any agreed currency up to the U.S. Dollar equivalent of (a) the greater of (x) $451 million or (y) 100% of Consolidated EBITDA (as defined and for periods set forth therein) plus (b) additional amounts subject to certain terms and conditions (including compliance with certain maximum leverage ratios). In addition to loans drawn down by the Company, certain of the Company’s foreign subsidiaries may draw loans on the New Credit Facility. Under the New Credit Facility, the revolving credit facility and term loan A will mature five years after the Effective Date and term loan B will mature seven years after the Effective Date. |
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