S&P changes Symplr view to negative

S&P said it changed Symplr Software Intermediate Holdings Inc.’s outlook to negative from stable but affirmed its B- issuer rating and the B rating on its first-lien debt. The first-lien loan’s 2 recovery rating is unchanged.

The outlook and affirmation follow Symplr’s acquisition of HealthcareSource HR Inc. with $1.275 billion of loans plus equity, the agency said.

“We view the HealthcareSource acquisition as increasing adjusted debt leverage, making near-term cash flows less predictable, and showing a willingness for the company to pursue debt-funded inorganic growth. Although we continue to expect positive cash flow generation in 2021, we expect cash flows to be less predictable over the near term as the company integrates all recent acquisitions, including TractManager, Phynd, and now HealthcareSource,” S&P said in a press release.

The outlook reflects the higher leverage and expectation for pro forma adjusted debt to EBITDA in the 11x-12x range, the possibility for more acquisitions and free cash flows that are still relatively modest.

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