DCM Syndicates C$160 Million Credit Facility and Adds C$25 Million Acquisition Accordion

DATA Communications Management Corp. has syndicated its C$160 million bank credit facility among four Canadian lenders and added an uncommitted C$25 million accordion that could provide extra funding for future acquisitions and permitted investments. The change broadens DCM’s lending group without increasing the C$160 million of committed facilities already put in place in July.

Bank of Montreal is administrative agent and lead arranger, with National Bank of Canada, Royal Bank of Canada and Bank of Nova Scotia joining the syndicate. The sixth amended and restated credit agreement matures July 8, 2029. DCM said its committed amounts are unchanged from the fifth amended agreement and that the financial covenants remain the same.

In its September 14 announcement, DCM said the new accordion can provide up to C$25 million in aggregate for acquisitions and permitted investments. The feature is uncommitted and requires lender consent, so it does not turn the facility into C$185 million of committed financing available to DCM on demand.

Syndication broadens DCM’s bank group

The immediate change is the lender structure. When DCM arranged the C$160 million facility in July, it entered the agreement with a Canadian chartered bank and contemplated a later syndication. Bank of Montreal now leads a four-bank group that also includes National Bank, RBC and Scotiabank. DCM President and CEO Richard Kellam described the expanded group as strengthening the company’s banking relationships and supporting its growth strategy.

Completing the syndication resolves one element that was still open when the July financing was announced. The fifth amended agreement allowed the bank, after consulting DCM, to adjust terms when reasonably necessary to facilitate a successful syndication or if syndication could not be completed. In the latest announcement, DCM specifically said the C$160 million of committed facilities did not change and that the same financial covenants continue to apply. The company did not disclose lender-by-lender commitments or borrowing spreads in the September 14 release.

Adding three banks does not remove the usual financing constraints. DCM’s latest risk disclosure notes that outstanding bank debt carries floating-rate exposure, meaning higher interest rates would increase borrowing costs. The company also identifies covenant compliance and continued availability of the facility as risks. Those points are relevant because the accordion is not a guaranteed pool of capital. Any future increase under that feature depends on lender consent.

The C$25 million accordion sits above the committed facility

DCM’s C$160 million base structure dates to the July financing arranged alongside its acquisition of Octacom Limited. It includes a C$70 million revolving credit facility for working capital and general corporate purposes, a C$40 million non-revolving term loan that refinanced debt owed to Fiera Private Debt Fund VI, and a C$50 million acquisition line. DCM said the term loan and acquisition line amortize over a 10-year period, even though the overall credit agreement matures in July 2029.

Under the July terms, DCM can draw the facility through Prime Rate loans, Base Rate loans, CORRA loans, SOFR loans and letters of credit. The company also said at the time that the amended facility lowered its average cost of debt capital. The September update did not provide new pricing information, so there is no basis from the latest announcement to quantify any further change in borrowing costs from the syndication itself.

Because the accordion sits outside the committed base, it adds potential acquisition capacity rather than changing the size of the existing three committed components. If lenders approve an increase, DCM can use the added amount for future acquisitions and permitted investments. Until then, the committed facility remains C$160 million, not C$185 million. That distinction is important when assessing how much financing DCM has contractually secured versus how much it may be able to add later.

Financing follows the Octacom acquisition and a lower pre-acquisition debt balance

DCM’s July financing was closely tied to its C$54 million purchase of Octacom, a Canadian provider of intelligent document processing, workflow automation and digital transformation services. The purchase price consisted of about C$43.2 million in cash and C$10.8 million in DCM shares. DCM used borrowings under the amended facility to fund the cash portion and also used part of the facility to repay its outstanding Fiera debt.

Octacom generated about C$23 million of revenue for the 12 months ended May 31, 2026, based on unaudited management-prepared financial statements cited by DCM. The acquisition moved DCM further into document automation and AI-enabled data capture while retaining Octacom as a DCM division with its existing name, operating footprint and team. The new accordion gives DCM a mechanism to seek additional lender-backed capacity if management pursues another acquisition or permitted investment.

DCM entered the July acquisition from a balance sheet that had shown debt reduction through the end of the second quarter. At June 30, the company reported net debt of C$64.6 million, a non-IFRS measure, down C$12.5 million from C$77.1 million at the end of 2025. Cash generated from operating activities was C$22.9 million for the first six months of 2026, compared with C$5.9 million a year earlier. Second-quarter revenue was C$110.9 million, down 2.5% from a year earlier, while adjusted EBITDA was C$14.2 million, down 14.1%.

Those June 30 debt figures predate the July 9 Octacom closing and the associated borrowings, so they should not be treated as a post-acquisition leverage snapshot. The September financing announcement likewise does not state how much of the C$160 million facility is currently drawn. What it does establish is a wider four-bank syndicate, an unchanged C$160 million committed amount, a July 2029 maturity and an additional acquisition option that remains subject to lender approval. DCM said the sixth amended and restated credit agreement will be filed under its SEDAR+ profile, where the full terms and conditions can be reviewed once the filing is available.