System1 announced a comprehensive debt exchange transaction with all of its existing term loan and revolving credit facility lenders, significantly strengthening its balance sheet, reducing total indebtedness, and extending debt maturities through 2031.
Under the agreement, the company will replace its existing term loan and revolving credit facilities, which together total approximately $302.6 million in outstanding balances, with a new $150 million term loan facility that matures in January 2031. The transaction also includes the issuance of convertible preferred stock with an aggregate initial stated value of $39.3 million and a one-time cash payment of approximately $31.4 million to participating lenders.
The company said the transaction received participation from 100% of its existing term loan and revolver lenders and resolves all outstanding disputes with the lender group.
The existing term loan has an outstanding principal balance of $252.6 million and was scheduled to mature in July 2027, while the revolving credit facility carries a $50 million balance and matures in January 2027. Upon completion of the transaction, System1 expects to have reduced its total indebtedness by more than $160 million compared to the beginning of 2026.
The convertible preferred stock issuance remains subject to shareholder approval, which is required for the transaction to close. System1 expects the deal to close during the third quarter of 2026 following its annual shareholder meeting.
System1 Co-Founder, Chairman, and CEO Michael Blend said the agreement provides a stronger long-term capital structure and supports the company’s strategic priorities.
The company’s Chief Financial Officer, Tridivesh Kidambi, noted that the transaction improves leverage, extends debt maturities to 2031, and enhances financial flexibility while positioning the company for future growth and shareholder value creation.
System1 operates a portfolio of internet utility brands including CouponFollow, MapQuest, and Startpage.com, along with an artificial intelligence-powered customer acquisition and marketing platform.
KEY QUOTES:
“We are grateful to our lender group for their partnership and constructive engagement throughout this process. This transaction materially strengthens our balance sheet and provides a long-term capital structure that supports the focus and discipline we are bringing to the business. We believe this agreement positions System1 to continue executing against our strategic priorities while creating long-term value for shareholders.”
Michael Blend, Co-Founder, Chairman and Chief Executive Officer, System1
“Through this exchange we have delivered on our commitment to strengthening our capital structure and improving leverage over time. At the close of the transaction, we will have reduced our total indebtedness by over $160 million from the beginning of the year and extended our debt maturity cycle to 2031, with 100% lender participation. With the enhanced financial flexibility this transaction provides, we remain fully focused on executing on our strategic initiatives, driving meaningful growth and delivering long-term value to our shareholders.”
Tridivesh Kidambi, Chief Financial Officer, System1
