Digi International boosts credit line to $350M
Digi International Inc. (DGII) has amended and restated its senior secured revolving credit agreement, expanding its revolving credit facility to $350 million and extending maturity to August 27, 2031.
Rhea-AI Filing Summary
Digi International Inc. (DGII) has amended and restated its senior secured revolving credit agreement, expanding its revolving credit facility to $350 million and extending maturity to August 27, 2031. The facility replaces a prior $250 million revolver and includes a $10 million letter-of-credit sublimit, a $10 million swingline sub-facility, and a $75 million foreign-currency borrowing sublimit.
The agreement includes an uncommitted accordion feature for additional borrowing capacity of up to the greater of $130 million or 100% of trailing twelve-month EBITDA, plus an unlimited incremental amount subject to a total net leverage ratio of 2.50x. SOFR margins now range from 1.25% to 2.625%, improved from 1.35% to 3.10% under the prior facility, with commitment fees of 0.15%–0.275% on unused commitments. Digi must maintain a minimum interest coverage ratio of 3.00x and a maximum total net leverage ratio of 3.50x, with a covenant holiday permitting up to 4.00x following certain acquisitions.
Positive
- Expanded liquidity: Revolving credit facility increased from $250 million to $350 million, with an accordion feature that can raise total potential borrowing capacity to at least $480 million, enhancing funding flexibility for acquisitions and general corporate purposes.
- Lower borrowing costs: SOFR margins on the new facility range from 1.25% to 2.625%, improved from 1.35% to 3.10% under the prior facility, reducing Digi’s cost of debt when drawn.
- Extended debt maturity: The new credit facility matures on August 27, 2031, providing a longer-term capital structure and reducing near-term refinancing risk.
- More covenant flexibility: The maximum total net leverage covenant increased from 3.0x to 3.50x, with a temporary step-up to 4.0x after qualifying acquisitions, supporting Digi’s stated acquisition strategy.
Negative
- Increased secured debt capacity: The facility is a senior secured revolver backed by substantially all property of Digi and its domestic subsidiaries, and higher permitted leverage levels could increase financial risk if heavily utilized.
Filing Explained
The replacement facility is effective, but the disclosed $350 million is borrowing capacity—not evidence Digi received $350 million in cash.
On
The new
Although the press-release exhibit describes up to
8-K Event Classification
Key Figures
Key Terms
accordion feature financial
Term SOFR financial
total net leverage ratio financial
interest coverage ratio financial
covenant holiday financial
FAQ
What did Digi International (DGII) announce regarding its credit facility?
How large is Digi International’s (DGII) new revolving credit facility and potential accordion capacity?
How did borrowing costs change under Digi International’s (DGII) new facility?
What financial covenants apply to Digi International’s (DGII) new credit facility?
For what purposes can Digi International (DGII) use borrowings under the new facility?
What is the maturity date of Digi International’s (DGII) new credit facility?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
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| Item 1.01. | Entry into a Material Definitive Agreement. |
On August 27, 2026 (the “Closing Date”), Digi International Inc. (“Digi”) entered into an amended and restated revolving credit agreement (the “Credit Agreement”) with BMO Bank N.A. (“BMO”), as administrative agent and collateral agent, BMO Capital Markets Corp., Bank of America, N.A. and MUFG Bank, Ltd., as joint lead arrangers, BMO Capital Markets Corp. and Bank of America, N.A., as joint bookrunners, and the several banks and other financial institutions or entities from time to time party thereto as lenders (the “Lenders”). The Credit Agreement provides Digi with a $350 million senior secured revolving credit facility (the “Credit Facility”), with an uncommitted accordion feature that provides for additional borrowing capacity of up to (a) the greater of (i) $130 million or (ii) one hundred percent of trailing four quarter consolidated EBITDA, or (b) an unlimited amount subject to pro forma compliance with a total net leverage ratio of 2.50 to 1.00. The Credit Facility is scheduled to mature on August 27, 2031, the fifth anniversary of the Closing Date, and all outstanding principal will be due and payable on such date. The Credit Facility contains a $10 million letter-of-credit sublimit and a $10 million swingline sub-facility.
The Credit Agreement amends and restates in its entirety the Revolving Credit Agreement dated as of December 7, 2023 (the “Terminated Agreement”), which is further discussed in Item 1.02 below.
Digi may use the proceeds of the Credit Facility to finance future permitted acquisitions, the fees and expenses related thereto, and for general corporate purposes.
Borrowings of U.S. dollars under the Credit Facility bear interest at a rate per annum equal to Term SOFR, with a floor of 0.00% for an interest period of one, three, or six months as selected by Digi, reset at the end of the selected interest period (or a replacement benchmark rate if Term SOFR is no longer available) plus the applicable margin or a base rate plus the applicable margin. The base rate is determined by reference to the highest of (1) BMO’s prime rate, (2) the rate determined by BMO to be the average rate of Federal funds in the secondary market plus 0.50%, or (3) one-month SOFR plus 1.00%. Foreign currency borrowings may be made under the Credit Facility up to a sublimit of $75,000,000 and will bear interest at an index rate available in such currencies.
The applicable margin for loans under the Credit Facility is based on six pricing levels providing for a range of 1.25% to 2.625% for Term SOFR loans and foreign currency borrowings and a range of 0.25% to 1.625% for base rate loans, depending on Digi’s total net leverage ratio. The total net leverage ratio is defined as the ratio of (a)(i) Digi’s consolidated total funded indebtedness minus (ii) unrestricted cash as of such date up to a maximum amount of $50 million, to (b) consolidated EBITDA for such period.
In addition to paying interest on the outstanding principal, Digi is required to pay a commitment fee on the unutilized commitments under the Credit Facility. The commitment fee is between 0.15% and 0.275% depending on Digi’s total net leverage ratio. The Credit Facility is secured by substantially all of the property of Digi and its domestic subsidiaries.
The Credit Agreement requires Digi to maintain a minimum interest coverage ratio of 3.00 to 1.00 and a total net leverage ratio not to exceed 3.50 to 1.00, with certain exceptions for a covenant holiday of up to 4.00 to 1.00 after certain material acquisitions. The Credit Agreement also contains other customary affirmative and negative covenants, including covenants that restrict the ability of Digi and its subsidiaries to incur additional indebtedness, dispose of significant assets, make certain investments, including any acquisitions other than permitted acquisitions, make certain restricted payments, enter into sale and leaseback transactions or grant additional liens on its assets, subject to certain limitations.
The Credit Agreement contains customary events of default, the occurrence of which would permit the Lenders to terminate their commitments and accelerate loans under the Credit Facility, including failure to make payments under the Credit Facility, failure to comply with covenants in the Credit Agreement and other loan documents, cross default to other material indebtedness of Digi or any of its subsidiaries, failure of Digi or any of its subsidiaries to pay or discharge material judgments, bankruptcy of Digi or any of its subsidiaries, and change of control of Digi.
Certain Lenders under the Credit Facility have performed and may continue to perform commercial banking and financial services for Digi and its subsidiaries for which they have received and will continue to receive customary fees.
The foregoing description of the Credit Agreement and underlying Credit Facility does not purport to be complete and is qualified by reference to the text of the Credit Agreement, which is attached as Exhibit 10.1 to this current report on Form 8-K and incorporated herein by reference.
| Item 1.02. | Termination of Material Definitive Agreement. |
On August 27, 2026, in connection with the entry into the Credit Agreement, Digi paid off all amounts due and terminated in full all commitments under the Terminated Agreement. Certain lenders under the Terminated Agreement are or may be Lenders under the Credit Agreement. The material terms and conditions of the Terminated Agreement are described in Item 1.01 of Digi’s Form 8-K filed on December 11, 2023 and are incorporated by reference into this Item 1.02.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosure in Item 1.01 of this current report on Form 8-K regarding the Credit Agreement and Credit Facility is incorporated by reference into this Item 2.03.
| Item 7.01. | Regulation FD Disclosure. |
The text of Digi’s press release announcing the entry into the Credit Agreement is set forth in Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference into this Item 7.01.
| Item 9.01. | Financial Statements and Exhibits. |
| No. | Description | |
| 10.1* | Credit Agreement dated August 27, 2026, by and among Digi International Inc. as the borrower, BMO Bank, N.A., as administrative agent and collateral agent, BMO Capital Markets Corp., Bank of America, N.A. and MUFG Bank, Ltd., as joint lead arrangers, BMO Capital Markets Corp. and Bank of America, N.A., as joint bookrunners, and other lenders from time-to-time party thereto | |
| 99.1 | Press release dated August 31, 2026 | |
| 104 | The cover page from the Current Report on Form 8-K formatted in Inline XBRL |
* Pursuant to Item 601(a)(5) of Regulation S-K, the exhibits and schedules to Exhibit 10.1 have been omitted from this report and will be furnished supplementally to the Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized.
Date: August 31, 2026
| DIGI INTERNATIONAL INC. | ||
| By: | /s/ James J. Loch | |
| James J. Loch | ||
| Executive Vice President, Chief Financial Officer and Treasurer | ||
Exhibit 99.1
Digi International Expands Senior Secured Revolving Credit Facility to $350 Million
(Minneapolis, MN, August 31, 2026) - Digi International® Inc. (Nasdaq: DGII), a leading global provider of business and mission-critical Internet of Things ("IoT") products, services and solutions, today announced it has expanded and refinanced its senior secured revolving credit facility, increasing total borrowing capacity to $350 million.
The expanded facility replaces Digi's existing $250 million revolving credit facility and provides an increased accordion feature allowing for additional borrowing capacity of the greater of $130 million or 100% of trailing twelve month adjusted EBITDA. Combined with the accordion feature, Digi has access to total potential borrowing capacity of up to $480 million, plus an unlimited incremental amount subject to a pro forma total net leverage ratio not to exceed 2.50x. The new facility matures on August 27, 2031. The new facility also features improved pricing, with SOFR margins ranging from 125 to 262.5 basis points based on Digi's net leverage ratio, compared to a range of 135 to 310 basis points under the existing facility.
"This expanded facility reflects the confidence our banking partners have in Digi's business and our continued ability to generate strong cash flows," said Jamie Loch, Executive Vice President, CFO, and Treasurer. "The increased capacity and improved terms provide us with greater financial flexibility to support our strategic growth initiatives, both organically and through acquisitions, while also reducing our cost of borrowing. We remain focused on disciplined capital allocation and delivering long-term value for our shareholders."
The new facility also increases the maximum total net leverage ratio covenant from 3.0x to 3.50x, providing additional flexibility to pursue strategic acquisitions, with an acquisition holiday provision of 0.50x for four fiscal quarters following a qualifying acquisition. The minimum interest coverage ratio remains unchanged at 3.00x.
Subject to the terms of the new facility, Digi may use borrowings for working capital, capital expenditures, restricted payments, acquisitions, and other general corporate purposes.
BMO Bank N.A. serves as administrative agent for the facility and collateral agent. 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., as joint lead arrangers.
About Digi International
Digi International (Nasdaq: DGII) is a leading global provider of IoT connectivity products, services and solutions. We help our customers create next-generation connected products and deploy and manage critical communications infrastructures in demanding environments with high levels of security and reliability. Founded in 1985, we've helped our customers connect over 100 million things and growing. For more information, visit Digi's website at www.digi.com.
Forward-Looking Statements
This press release contains "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995, and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on management’s current expectations and assumptions. These statements often can be identified by the use of forward-looking terminology such as "assume," "believe," "continue," "estimate," "expect," "intend," "may," "remain," "plan," "potential," "project," "should," or "will" or the negative thereof or other variations thereon or similar terminology. Among other items, these statements relate to expectations of the business environment in which Digi operates, projections of future performance, including but not limited to expectations regarding Digi’s profitability and net cash position, inventory levels, perceived marketplace opportunities, debt repayments, attributions of actual or potential acquisitions and statements regarding our mission and vision. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions. Among others, these include risks related to our ability to realize synergies and operating benefits from completed acquisitions (like our recent acquisitions of Jolt completed in August 2025, and Particle completed in January 2026), ongoing and varying inflationary and deflationary pressures around the world and the monetary, fiscal and trade policies of governments globally as well as present and ongoing concerns about a potential economic slowdown, the potential for longer than expected sales cycles, the ability of companies like us to operate a global business in such conditions as well as negative effects on product demand and the financial solvency of customers and suppliers in such conditions, risks related to ongoing supply chain challenges, regulatory risks that include, but are not limited to, the potential expansion of tariffs and potential changes to regulations impacting the functionality or compliance of our products, risks related to cybersecurity, data breaches and data privacy, risks arising from military conflicts such as those in Ukraine, the Middle East, and geopolitical tensions including those involving China and Taiwan, the highly competitive market in which we operate, rapid changes in technologies that may displace products sold by us, declining prices of networking products, our reliance on distributors and other third parties to sell our products, the potential for significant purchase orders to be canceled or changed, delays in product development efforts, uncertainty in user acceptance of our products, the ability to integrate our products and services with those of other parties in a commercially accepted manner, potential liabilities that can arise if any of our products have design or manufacturing defects, our ability to defend or settle satisfactorily any litigation, the impact of natural disasters and other events beyond our control that could negatively impact our supply chain and customers, potential unintended consequences associated with restructuring, reorganizations or other similar business initiatives that may impact our ability to retain important employees or otherwise impact our operations in unintended and adverse ways, and changes in our level of revenue or profitability which can fluctuate for many reasons beyond our control. These and other risks, uncertainties and assumptions identified from time to time in our filings with the United States Securities and Exchange Commission, including without limitation, those set forth in Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended September 30, 2025, and any other subsequent filings, could cause our actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. Many of such factors are beyond our ability to control or predict. These forward-looking statements speak only as of the date for which they are made. Except to the extent required by law, we do not undertake, and expressly disclaim, any intent or obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Contact:
| Rob Bennett |
| Investor Relations |
| Digi International |
| Email: rob.bennett@digi.com |