R1 RCM launches $500 million term loan B at SOFR plus 325-350 bps

By Sara Rosenberg

New York, Dec. 7 – R1 RCM Inc. launched on Thursday its non-fungible $500 million incremental senior secured first-lien term loan B due June 2029 (Ba3/B+/BBB-) with price talk of SOFR plus 325 basis points to 350 bps with a 0% floor and an original issue discount of 98.5, according to a market source.

The incremental term loan has 101 soft call protection for six months, and a ticking fee of half the margin from days 46 to 90 and the full margin thereafter, the source said.

JPMorgan Chase Bank, BofA Securities Inc. and Barclays provided the debt commitment. BofA Securities is the administrative agent.

Commitments are due at 5 p.m. ET on Dec. 14.

Proceeds will be used to help fund the acquisition of Acclara from Providence for $675 million in cash and warrants to purchase 12.2 million shares of R1 RCM stock.

Other funds for the transaction will come from borrowings under the company’s existing revolving credit facility and cash on hand.

Closing is expected in early 2024, subject to customary conditions, including regulatory approvals, as well as the entry of Providence and Acclara into a 10-year revenue cycle management agreement.

Pro forma credit agreement net leverage is expected to be around 3.2x at close.

R1 RCM is a Murray, Utah-based provider of technology-driven solutions that transform the patient experience and financial performance of health care providers. Acclara is a provider of revenue cycle management solutions to the health care industry.

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