Forrester details new $125 million term loans, $75 million revolver

By Sarah Lizee

Olympia, Wash., Jan. 3 – Forrester Research, Inc. provided more details for its new $125 million in senior secured term loans and $75 million senior secured revolving credit facility in an 8-K filing with the Securities and Exchange Commission.

The company entered into the credit agreement on Thursday with JPMorgan Chase Bank, NA and Merrill Lynch, Pierce, Fenner & Smith Inc. as joint lead arrangers and bookrunners, with JPMorgan as administrative agent. Bank of America, NA is the syndication agent.

The facilities are scheduled to mature on Jan. 3, 2024.

Borrowings bear interest at Libor plus 175 basis points to 250 bps and the commitment fee ranges from 25 bps to 35 bps, based on leverage. The initial margin over Libor is expected to be 250 bps, as previously reported.

The outstanding principal balance of the term loans will be subject to quarterly amortization payments, beginning on March 31, 2019, in an amount ranging from $1,562,500 to $3,906,000 per quarter, with the balance being due at maturity. No interim amortization payments are required for the revolver.

The borrower may add one or more incremental term loan A facilities and/or increase commitments under the revolver in a total amount of up to $50 million.

The company may voluntarily prepay borrowings at any time without premium or penalty, other than customary breakage reimbursement requirements for Libor-based loans.

The term loans must be prepaid with net cash proceeds of some debt incurred or issued by Forrester and its restricted subsidiaries and some asset sales and condemnation or casualty events, subject to reinvestment rights.

All obligations of Forrester under the credit facilities are unconditionally guaranteed by all of its material wholly owned domestic subsidiaries, other than certain excluded subsidiaries. Subject to customary limitations, the obligations are also secured by a first-priority lien on substantially all of the assets of Forrester and the guarantors.

Financial covenants require Forrester to have a ratio of consolidated funded debt to consolidated EBITDA of no more than 4 to 1 as of the last day of each fiscal quarter and a consolidated fixed-charge coverage ratio of equal to or greater than 1.25 to 1 as of the last day of each fiscal quarter.

Forrester used all proceeds from the term loans and $50 million from the revolver to pay a portion of the cash consideration of its $245 million acquisition of SiriusDecisions, Inc. Cash on hand was also used for the transcation.

The revolver may be used for working capital and general corporate purposes, and up to $5 million may be used to obtain letters of credit.

Forrester Research is a research and advisory firm based in Cambridge, Mass. SiriusDecisions is a Wilton, Conn.-based company that provides advisory, consulting and learning services to help executives improve the performance of their sales, marketing and product strategies.

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