Moody’s assigns RXBenefits B3

Moody’s Investors Service said it assigned ratings to RXBenefits (RXB Holdings Inc.), including a B3 corporate family rating, B3-PD probability of default rating and a B2 rating to the senior secured first-lien credit facilities. The outlook is stable.

“RxBenefits’ B3 CFR is constrained by its small size with less than $150 million in revenue and its very high financial leverage. Moody’s estimates debt/EBITDA, pro forma for the transaction of approximately 8.8x for the 12 months ended Sept. 30, 2020, improving to about 7.5x by the end of 2021. The ratings are constrained by RxBenefits’ reliance on the three largest pharmacy benefit managers (PBMs), for a majority of its revenue,” Moody’s said in a press release.

Proceeds from the $300 million first-lien term loan and an unrated $120 million second-lien term loan will be used, along with rollover and new equity, to finance the recapitalization of RxBenefits by Advent International Corp. and Great Hill Partners. The remaining stake will be owned by the company’s management and other shareholders.

The outlook reflects the view that scale and earnings will grow, driven by new lives under management, but that debt/EBITDA will remain very high at over 7x over the next 18 months, Moody’s said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.