The refinancing extends maturities and provides $30M of undrawn capacity for acquisitions and working capital. Monitor the company's Consolidated Net Leverage Ratio at the next quarterly compliance certificate — the 3.50x covenant is tighter than many software companies' typical leverage. The $2.4M in prepayment penalties on the old MidCap debt suggests the prior facility had meaningful prepayment protection, which is now eliminated.
Price Chart
Executive Summary
Asure Software entered into a $115 million senior secured credit facility with MUFG Bank, consisting of an $85 million term loan (fully drawn at closing), a $10 million revolving facility, and a $20 million delayed-draw term loan. Proceeds were used to repay approximately $62.6 million in existing debt (including $60.2 million principal and $2.4 million in prepayment fees) to MidCap Financial Trust), fund a $26.5 million asset acquisition in the southeastern U.S. (including $13.5M cash, a $3M seller note, and 1,206,141 shares of common stock valued at $10M), and pay transaction fees. The new facility matures in 2031 with quarterly amortization and a floating interest rate (initial rate 7.04249% for the first three-month Term SOFR period).
Key Financial Metrics
Key Facts
- Asure Software entered into a Credit Agreement with MUFG Bank, Ltd. for up to $115 million in senior secured credit facilities.
- The facility comprises an $85 million term loan (fully drawn on closing), a $10 million revolving credit facility, and a $20 million delayed-draw term loan.
- The initial interest rate on the $85 million term loan is 7.04249% (Term SOFR + 3.00%) for the first three-month period.
- Proceeds from the term loan were used to repay approximately $62.6 million of existing debt under the MidCap Credit Agreement, including $60.2 million principal/interest and $2.4 million in prepayment/termination fees.
- The company acquired certain assets of a payroll processing business (SEUS Seller) for $26.5 million: $13.5 million cash, a $3.0 million promissory note (3% interest, matures April 2028), and 1,206,141 shares of common stock valued at $10 million.
- The company issued 1,206,141 shares of common stock at $8.29 per share to the SEUS Seller in an unregistered private placement exempt under Section 4(a)(2) and Rule 506(b).
- The Credit Agreement includes financial covenants: Consolidated Net Leverage Ratio ≤ 3.50x (stepping to 3.75x after a Specified Permitted Acquisition) and Consolidated Fixed Charge Coverage Ratio ≥ 1.25x.
- The Credit Agreement is secured by substantially all assets of the company.
- The Revolving Facility is available through October 15, 2031; the DDTL Facility is available through October 15, 2028.
- Quarterly principal amortization on the term loan begins April 1, 2027: 2.5% in year 1, 5.0% in years 2-3, 7.5% in years 4-5, with remaining balance due at maturity on October 15, 2031.
Financial Impact
Refinanced ~$62.6M of existing debt (including $2.4M in prepayment/termination fees) and funded a $26.5M asset acquisition. New debt of $85M drawn, with $30M additional capacity available ($10M revolver + $20M DDTL). The interest rate on the new term loan is 7.04249% for the initial period.
Risk Factors
- The $85M term loan adds significant leverage; the 3.50x net leverage covenant leaves limited headroom if EBITDA declines.
- The 7.04249% initial interest rate is elevated, increasing interest expense and pressuring free cash flow.
- Dilution from the 1,206,141 share issuance (approximately 4-5% of shares outstanding based on typical float) may pressure the stock.
- The $3M seller note matures in April 2028, adding a near-term cash obligation.
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001104659-26-116616 |
| Document: tm2627663d1_8k.htm | 0001104659-26-116616 |
| Document: 0001104659-26-116616-index-headers.html | 0001104659-26-116616 |
| Document: 0001104659-26-116616-index.html | 0001104659-26-116616 |
| Document: 0001104659-26-116616.txt | 0001104659-26-116616 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 16, 2026 11d ago | 8-K | $7.04 | awaiting T+20 | — | $7.25 (+2.98%) |
Oct 15, 2026 12d ago | Press Release | $7.08 | awaiting T+20 | — | $7.25 (+2.40%) |
Jul 1, 2026 16w ago | Press Release | $8.13 $8.44 | ▲ +3.81% | ▲ +6.00% | $7.25 (−10.82%) |
Apr 16, 2026 27w ago | Press Release | $9.15 | awaiting T+20 | — | $7.25 (−20.77%) |
Mar 23, 2026 31w ago | Press Release | $8.56 $9.08 | ▲ +6.07% | ▼ −1.34% | $7.25 (−15.30%) |
US Market Status
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