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R1 RCM ups talk on $270 million term loan to Libor plus 525-550 bps
By Sara Rosenberg
New York, April 30 – R1 RCM Inc. increased price talk on its $270 million seven-year term loan B to a range of Libor plus 525 basis points to 550 bps from a range of Libor plus 475 bps to 500 bps, according to a market source.
Additionally, the original issue discount on the term loan was changed to 97 from 99.5, the 101 soft call protection was extended to one year from six months and a net first-lien leverage covenant was added to the previously covenant-light loan, the source said.
As before, the term loan has a 0% Libor floor.
The company’s $295 million of credit facilities (B1/B) also include a $25 million five-year revolver.
Bank of America Merrill Lynch and Ares are the lead arrangers on the deal.
Recommitments were scheduled to be due at 5 p.m. ET on Monday, the source added.
Proceeds will be used to help fund the acquisition of the health care division of Intermedix Corp., comprised of its physician and emergency medical services revenue cycle management, practice management and analytics businesses.
Other funds for the transaction will come from $104 million of cash on hand and $110 million eight-year subordinated PIK toggle notes that were privately placed with TowerBrook Capital Partners, Ascension Health and Intermountain Health.
First-lien leverage is 3.4 times and total leverage is 4.8 times based on fiscal year Dec. 31, 2017 pro forma adjusted EBITDA of $79 million, including $15 million of expected synergies.
Closing is expected this week.
R1 RCM is a Chicago-based provider of revenue cycle management and physician advisory services to health care providers.
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