Digi International Expands Revolving Credit Facility to $350 Million
Digi International Inc. (Nasdaq: DGII), a global provider of business and mission-critical Internet of Things (IoT) connectivity products, services and solutions, has announced the expansion and refinancing of its senior secured revolving credit facility. The new agreement increases the company’s total borrowing capacity from $250 million to $350 million, providing Digi with greater financial flexibility to support its growth strategy and future investment opportunities.
The expanded credit facility replaces Digi’s previous $250 million revolving facility and includes an enhanced accordion feature that gives the company access to additional borrowing capacity. Under the new agreement, Digi can increase the facility by the greater of $130 million or 100% of trailing twelve-month adjusted EBITDA, subject to the terms and conditions of the credit agreement.
When the accordion feature is included, Digi has potential total borrowing capacity of up to $480 million. The company may also access an unlimited incremental amount, provided that its pro forma total net leverage ratio does not exceed 2.50x.
The new credit facility is scheduled to mature on August 27, 2031, extending Digi’s access to committed financing while providing a longer-term capital structure to support its strategic objectives.
Improved Borrowing Terms
In addition to increasing its overall borrowing capacity, Digi has secured improved pricing under the new facility.
The interest rate margins tied to the Secured Overnight Financing Rate (SOFR) now range from 125 basis points to 262.5 basis points, depending on Digi’s net leverage ratio. This represents an improvement over the previous facility, which carried SOFR margins ranging from 135 basis points to 310 basis points.
The lower pricing could help reduce Digi’s borrowing costs, particularly as the company’s leverage profile improves. Combined with the increased capacity, the refinancing gives Digi greater flexibility to manage its capital requirements while maintaining a focus on disciplined financial management.
Jamie Loch, Executive Vice President, Chief Financial Officer and Treasurer at Digi International, said the expanded facility reflects the confidence of the company’s banking partners in Digi’s business and its ability to generate strong cash flow.
Loch noted that the increased borrowing capacity and improved financial terms provide Digi with additional flexibility to pursue strategic growth opportunities, both through organic initiatives and acquisitions, while reducing its overall cost of borrowing.
The company remains focused on disciplined capital allocation and creating long-term value for shareholders.
Greater Flexibility for Strategic Acquisitions
The new credit agreement also provides Digi with additional financial flexibility when pursuing acquisitions.
Under the revised facility, the maximum total net leverage ratio covenant has been increased from 3.0x to 3.50x. This higher threshold gives Digi additional room to finance and complete strategic acquisitions without immediately facing the tighter leverage restrictions associated with its previous facility.
The agreement also includes an acquisition holiday provision of 0.50x for four fiscal quarters following a qualifying acquisition. This provision is designed to provide additional temporary leverage flexibility after eligible acquisitions, giving Digi more time to integrate acquired businesses and manage its balance sheet.
Despite the changes to the leverage covenant, the company’s minimum interest coverage ratio remains unchanged at 3.00x.
The combination of increased borrowing capacity, a higher leverage threshold and the acquisition holiday could provide Digi with greater flexibility to pursue transactions that complement its existing technology portfolio and long-term business strategy.
Supporting IoT Growth
Digi International operates in the rapidly expanding IoT connectivity market, providing products and services that help businesses connect, monitor and manage devices and communications infrastructure.
The company offers solutions designed for demanding environments where security, reliability and continuous connectivity are critical. Its technology portfolio supports organizations seeking to deploy connected devices and manage communications infrastructure at scale.
Digi’s expanded credit facility is intended to provide funding flexibility for a range of corporate purposes. Subject to the terms of the agreement, the company may use borrowings for working capital, capital expenditures, restricted payments, acquisitions and other general corporate purposes.
The additional capacity could therefore support both day-to-day operational requirements and larger strategic initiatives as Digi continues to expand its business.
Financing Partners
BMO Bank N.A. serves as the administrative agent and collateral agent for the new revolving credit facility.
BMO Capital Markets Corp. and Bank of America, N.A. serve as joint bookrunners. BMO Capital Markets Corp., Bank of America, N.A. and MUFG Bank, Ltd. are serving as joint lead arrangers for the transaction.
The participation of these financial institutions provides It with a structured financing arrangement designed to support its ongoing capital needs.
Digi’s Growth and Acquisition Strategy
It has continued to expand its technology portfolio through both organic development and acquisitions. The company has recently completed acquisitions including Jolt, acquired in August 2025, and Particle, acquired in January 2026.
These transactions form part of It’s broader strategy to expand its IoT capabilities and strengthen its ability to serve customers with increasingly complex connectivity requirements.
The newly expanded credit facility provides additional financial resources that could be used to support similar strategic initiatives in the future. At the same time, It’s emphasis on disciplined capital allocation indicates that the company intends to balance growth investments with financial flexibility and shareholder value creation.
Risks and Forward-Looking Statements
It’s announcement contains forward-looking statements concerning its future business environment, financial performance, strategic opportunities and use of capital.
The company cautions that these statements are based on current expectations and assumptions and are not guarantees of future results. Actual performance could differ materially due to a variety of factors.
Potential risks include the company’s ability to achieve expected synergies and operating benefits from recent acquisitions, changes in global economic conditions, inflationary and deflationary pressures, monetary and fiscal policies, potential economic slowdowns and longer-than-expected sales cycles.
It also faces risks related to global supply chains, tariffs, regulatory changes, cybersecurity, data breaches, data privacy, geopolitical tensions and military conflicts. Other potential challenges include intense competition, rapid technological change, declining networking product prices, reliance on distributors and third parties, order cancellations, product development delays and customer acceptance.
Additional risks include product integration challenges, potential design or manufacturing defects, litigation, natural disasters, restructuring initiatives and fluctuations in revenue and profitability.
It states that these and other risks are detailed in its filings with the U.S. Securities and Exchange Commission (SEC), including the Risk Factors section of its Annual Report on Form 10-K for the fiscal year ended September 30, 2025, as well as subsequent filings.
About Digi International
Digi International (Nasdaq: DGII) is a global provider of IoT connectivity products, services and solutions. Founded in 1985, the company helps businesses develop connected products and deploy and manage mission-critical communications infrastructure in environments where security and reliability are essential.
Digi says its solutions have helped customers connect more than 100 million devices, with that number continuing to grow.
The company’s expanded and refinanced credit facility strengthens its financial position and provides additional capacity to support working capital, capital expenditures, acquisitions and other corporate initiatives. With a larger revolving facility, improved borrowing terms and greater leverage flexibility, It is positioned to pursue its growth strategy while maintaining a focus on disciplined capital allocation and long-term shareholder value.
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