Rimini Street Amends Credit Agreement, Capping Future Restricted Payments

summarizeSummary

Rimini Street, Inc. amended its credit agreement to cap annual restricted payments, including share repurchases, at $20 million and aggregate payments at $50 million, removing previous EBITDA-linked flexibility.

check_boxKey Events

• Credit Agreement Amended

  Rimini Street, Inc. entered into Amendment No. 1 to its Amended and Restated Credit Agreement dated April 30, 2024, with Capital One, National Association and other lenders.

• Restricted Payment Limits Revised

  The amendment sets new fixed limits for "Restricted Payments," which include share repurchases. Commencing with fiscal year 2026, annual payments are capped at $20,000,000. Aggregate payments made on or after January 1, 2026, are capped at $50,000,000.

• Removed EBITDA-Linked Flexibility

  The previous agreement allowed for higher restricted payments based on a percentage of LTM Consolidated EBITDA, which has now been replaced by fixed dollar amounts, potentially limiting the upside for capital returns if the company's profitability significantly improves.

auto_awesomeAnalysis

The amendment to the credit agreement introduces fixed annual and aggregate limits on "Restricted Payments," which include share repurchases. While the new annual limit of $20 million is a substantial amount for a company of this size, the removal of the previous EBITDA-linked calculation means the company's ability to make larger payments will no longer scale with potential future earnings growth. This change provides a clear framework for capital allocation but removes the upside flexibility for more aggressive capital returns that might have been possible under the prior agreement, especially following the company's recent financial turnaround.