Canadian cannabis company Decibel Cannabis Company Inc. has completed new financing agreements worth a total of $61 million with ATB Financial and ATB Cormark Capital Markets, together referred to as ATB.
The largest part of this financing is a $40 million First Lien Term Facility. A "first lien" means ATB has first priority over the company's assets if the loan is not repaid. This loan replaces an older facility that was due in January 2027. Decibel will make regular repayments over time, with a larger final payment due at the end of the loan term.
Decibel also secured a $10 million Revolving First Lien Credit Facility. This works like a credit line, allowing the company to borrow funds as needed. $3 million is available immediately, with the rest accessible once certain conditions are met. In addition, Decibel arranged an $11 million Second Lien Term Facility. This loan does not increase total debt but helps reduce payments due in 2026, improving cash flow.
"With our existing term loan coming due in January 2027, we were proactive in securing refinancing that extends our maturities to February 2030, reduces our 2026 payment obligations by $5 million, and provides an upsized revolver that allows us to pursue corporate development initiatives." said Ben Sze, Chief Executive Officer of Decibel. "We are now free cash flow positive and without any material near-term debt maturities. The Company remains well positioned to continue its leadership in the Canadian ready-to-consume categories and to drive significant international growth and financial performance through our international business with the AgMedica facility. I also want to thank the ATB team for their support of our business and delivering a market leading four-year term on this financing."
"We are incredibly excited to partner with ATB to position Decibel for continued growth of the business domestically and abroad while strengthening our balance sheet", said Stuart Boucher, Chief Financial Officer of Decibel. "Our strengthened balance sheet will position the Company to pursue corporate development initiatives. Our return on investment on the AgMedica acquisition exceeds 50% annualized and we believe that the available capital will allow us to pursue further opportunities to develop our business and gain scale to become a leading global cannabis company. Capital remains tight in the industry and with this new financing we will be able to pursue opportunities that drive value for the business while still maintaining a debt to EBITDA ratio of less than 2.0x."
For more information:
Decibel Cannabis Company
[email protected]
decibelcc.com
