Ibex Ltd (NASDAQ:IBEX), a company specializing in computer processing and data preparation services, announced on Monday the successful negotiation of new credit agreements totaling $75 million. The agreements, signed on October 29, 2024, include a $25 million secured revolving credit facility with HSBC Bank USA and a $50 million credit arrangement with HSBC Bank Middle East Limited, alongside a $50,000 credit card facility.
The new credit lines will primarily be used to repay the company's previous $80 million credit facility, which was fully settled upon the establishment of the new agreements. The remaining funds are earmarked for working capital and general corporate purposes.
Interest rates for the new U.S. credit facility are set at term SOFR plus 2%, or an alternate base rate plus 1%. The company is also obligated to pay a 0.15% closing fee and a 0.25% annual commitment fee on the unutilized portion of the facility. Similarly, the UAE credit facility carries an interest rate of 3-month term SOFR plus 2%, with comparable fees for processing and commitment.
Both credit agreements include financial covenants related to leverage and fixed charge coverage ratios, as well as non-financial covenants that impose restrictions on additional debt, asset disposals, and certain transactions with affiliates.
In other recent news, IBEX Ltd (NASDAQ:IBEX). has been the center of several significant developments. The company reported a record increase in earnings per share (EPS) to $2.10 and a rise in free cash flow to $27 million. Despite a slight annual revenue decrease to $509 million, IBEX's Q4 revenue showed a year-over-year increase. For fiscal year 2025, the company anticipates revenue between $510 million and $525 million and adjusted EBITDA of $67 million to $69 million.
Baird, a financial services firm, has maintained an Outperform rating on IBEX shares, with a price target of $23.00, citing an attractive risk/reward profile. Similarly, RBC Capital Markets has increased its price target for IBEX from $18 to $20, maintaining a Sector Perform rating, reflecting confidence in IBEX's strategic direction.
In addition, IBEX has entered a strategic partnership with AI automation solutions firm Parloa, aiming to enhance customer experience through the integration of Parloa's AI into ibex's Wave iX solutions suite. This collaboration is expected to enable more personalized and efficient customer interactions.
Finally, IBEX has been actively repurchasing its shares, with a strategy that resulted in the acquisition of 8% of its shares during the fiscal year 2024, often viewed as a sign of confidence in its financial health and future prospects.
InvestingPro Insights
Ibex Ltd's recent credit agreements align well with its financial strategy, as highlighted by several InvestingPro metrics and tips. The company's market cap stands at $308.99 million, indicating a mid-sized player in the industry. Notably, Ibex is trading at a low P/E ratio of 9.72, which suggests the stock may be undervalued relative to its earnings.
An InvestingPro Tip reveals that Ibex operates with a moderate level of debt, which is consistent with the company's recent move to restructure its credit facilities. This prudent approach to debt management is further supported by another InvestingPro Tip indicating that Ibex's cash flows can sufficiently cover interest payments. This financial stability bodes well for the company's ability to service its new credit agreements.
The company's profitability is also noteworthy, with an InvestingPro Tip confirming that Ibex has been profitable over the last twelve months. This is reflected in its solid EBITDA of $61.92 million for the same period. Additionally, analysts predict continued profitability for the company this year, which aligns with Ibex's strategy to use the new credit facilities for working capital and general corporate purposes.
Investors seeking more comprehensive insights can access 11 additional InvestingPro Tips for Ibex, providing a deeper understanding of the company's financial health and market position.
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