March 17, 2008 // Franchising.com // Virginia Beach, VA – JTH Tax, Inc. d/b/a Liberty Tax Service today announced that it had established a new $100 million, five-year credit facility with a syndicate of ten banks. This credit facility also allows for potential additional commitments for revolving loans that would increase the facility to $150 million. Liberty Tax Service will use the credit facility, which was 70% over-subscribed, to provide seasonal working capital needs, finance capital expenditures and potential acquisitions, for share repurchases as well as for general corporate purposes. The revolving credit facility contains typical covenants, such as the maintenance of certain leverage and fixed-charge coverage ratios.
SunTrust Robinson Humphrey, Inc. acted as the sole lead arranger and book manager. Members of the syndicate include SunTrust Bank as administrative agent, Wachovia Bank, Bank of America, RBC Centura Bank, BB&T, Citizens Bank, Commerce Bank, First Tennessee Bank, Comerica Bank and Second Bank & Trust.
"We appreciate the strong interest and confidence the banking community has in our business and its continued growth," said Mark F. Baumgartner, Vice President and CFO of Liberty Tax Service. "This credit facility provides us with additional financial resources, as well as flexibility to pursue our growth strategy and to take advantage of market opportunities."
"The completion of this credit facility in a tough credit environment reflects our continued ability to execute and manage our high growth rate," said John Hewitt, CEO and President of Liberty Tax Service. "In addition, it demonstrates the results our dedicated entrepreneurial franchisees are achieving by following our proven operating system," added Hewitt.
Liberty Tax Service is the fastest growing retail tax preparation company in the industry's history. Founded in Virginia Beach, Virginia in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service (www.libertytax.com) has prepared over 5,000,000 individual tax returns and currently operates over 2,700 offices throughout the United States and Canada.
Liberty Tax Service provides computerized income tax preparation, electronic filing and refund loans. With an emphasis on customer service including audit assistance, a money back guarantee, and free tax return checking, Liberty Tax Service is well known for its strong commitment to its client base.
With 39 years of tax experience, Hewitt stands as the most experienced CEO in the tax preparation industry, having also founded Jackson Hewitt Tax Service (NYSE: JTX).