Congrats to KLDiscovery for the announcement that KLDiscovery enters into agreements to reinforce long-term financial foundation! Part of the press release is below, the full press release is here.

KLDiscovery Enters into Transaction Support Agreement and Exchange Agreement to Reinforce Long-Term Financial Foundation

Signs definitive documentation with debenture holders, term loan lenders, revolving credit facility lender, and largest shareholder to strengthen balance sheet and reduce debt, positioning the Company to execute its long-term strategic plan

Company remains focused on meeting increased market demand for its unique and comprehensive services and solutions

Transaction expected to close in the third quarter of 2024

Eden Prairie, MN – July 8, 2024 – (BUSINESS WIRE) KLDiscovery Inc. (“KLDiscovery” or the “Company”), a global leader in data management, information governance, eDiscovery, and advisory services solutions, today announced that it has signed a transaction support agreement (the “TSA”) with its convertible debenture holders, term loan lenders, revolving credit facility lender, and largest shareholder and an exchange agreement with its convertible debenture holders. This represents an important step toward closing a transaction that will significantly reduce the Company’s long-term debt and strengthen its financial position, enabling KLDiscovery to focus on its growth model and investment in market-leading client solutions.

“We are pleased to reach this significant milestone with our capital partners as we drive toward closing this transaction in the near term,” said Chris Weiler, Chief Executive Officer of KLDiscovery. “KLDiscovery’s future is focused on growth through technology and service innovation. This transaction will bolster our balance sheet and position us for long-term success. With the support of our long-term stakeholders and our dedicated team driving us forward, we remain committed to delivering exceptional service and pioneering solutions for our clients.”

Under the TSA and the related definitive documents, KLDiscovery’s outstanding convertible notes will be cancelled and exchanged for new shares representing approximately 96% of the Company’s pro forma outstanding common equity (on a diluted basis) and the maturity of the Company’s term loan will be extended to August 2027. This transaction will result in both a meaningful reduction in KLDiscovery’s overall debt and the successful elimination of its near-term debt maturities. The documentation also contemplates KLDiscovery receiving committed second lien secured financing to support future operations and growth.

The signing of these transaction documents reflects the continued strong support of KLDiscovery’s debenture holders, term loan lenders, revolving credit facility lender, and largest shareholder, who are confident in the Company’s prospects and business strategy.

Kevin Griffin, CEO & Chief Investment Officer of debenture holder MGG Investment Group, said, “We are looking forward to working with Chris and the entire KLDiscovery team to build on the Company’s impressive track record. As corporations continue to grapple with more and more complex litigation and regulatory compliance matters, KLDiscovery is well-positioned to capture the growing demand for its industry-leading specialized eDiscovery, information governance, and data recovery solutions globally. The Company’s robust pipeline will be supported by a strong balance sheet that will allow it to actively pursue many growth opportunities available to it.”

The transaction remains subject to satisfying certain closing conditions and is expected to close in the third quarter of 2024. In the interim, KLDiscovery continues to focus on meeting the increased market demand for its unique and comprehensive solutions headlined by Nebula, the Company’s flagship, end-to-end AI / ML powered solution that serves as a singular platform of engagement for legal and other types of data. The Company maintains its commitment to providing its clients with the highest quality services, market-leading data security, and uninterrupted access to its entire portfolio of services and technology.

Congrats again to KLDiscovery for the announcement that KLDiscovery enters into agreements to reinforce long-term financial foundation!

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