Everbridge's Debt Retirement Ahead Of Any Refinancing Should Benefit Company, Analyst Says

  • Raymond James analyst Alexander Sklar had an Outperform rating on Everbridge, Inc EVBG.
  • EVBG announced it had repurchased $99.3 million of its 2024 0.125% convertible senior notes for ~$90.7 million
  • Post the repurchase, it will still have ~$351 million remaining on its 2024 notes and $726 million in total face value of debt, including its 2026 converts. EVBG’s net leverage stands at 4.3x following this action.
  • He views the retirement of its converts at a discount as one of EVBG’s better uses of cash as the company focuses on profitable growth. 
  • While the ~$9 million debt discount does not significantly reduce net leverage, EVBG reduced its gross debt load by 12%, which should help ease a potential overhang on the stock. 
  • He believed EVBG should be able to refinance or pay off its remaining ~$351 million of 2024 notes with its ~$400 million cash and estimated FCF generation of ~$118 million over the next two years.
  • He believed steps to reduce its overall debt load ahead of any potential refinancing should benefit the company and ultimately be accretive to its equity value. 
  • Before this transaction, he was already modeling EVBG’s net leverage to decline to ~2.8x, exiting 2023 through cash generation and continued EBITDA improvements.
  • Price Action: EVBG shares traded higher by 0.23% at $30.97 on the last check Friday.
  • Photo Via Company
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