Cotiviti to launch $550 million add-on term loan on Tuesday

By Sara Rosenberg

New York, Feb. 1 – Cotiviti, Inc. will hold a lender call at 2 p.m. ET on Tuesday to launch a fungible $550 million add-on term loan, according to a market source.

J.P. Morgan Securities LLC is the lead on the deal.

Proceeds will be used to fund the acquisition of HMS’ capabilities focused on the commercial, Medicare, and federal markets

Commitments are due at noon ET on Feb. 11, the source added.

Pricing on the company’s existing term loan is Libor plus 450 basis points with a 0% Libor floor.

In December, HMS announced that it is being acquired by Veritas Capital for $37 per share in cash, or about $3.4 billion. Veritas-backed Gainwell Technologies will acquire the HMS capabilities focused on the Medicaid market, including solutions delivered to states and managed care organizations. As noted above, Veritas-backed Cotiviti will acquire the HMS capabilities focused on the commercial, Medicare and federal markets.

Closing is expected in the first half of this year, subject to the approval of HMS shareholders and the satisfaction of customary conditions, including regulatory approvals.

Cotiviti is a South Jordan, Utah-based health care analytics company.

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