S&P rates EyeSouth, loans B-

S&P said it assigned B- ratings to EyeSouth Partners (SCP Eye Care Services LLC) and its planned first-lien debt. The recovery rating is 3.

“Our ratings reflect the company's small scale, narrow business focus, and high leverage of around 10x in 2021, partially offset by the company's leading position in the highly fragmented ophthalmology market. Our rating reflects EyeSouth's small scale with projected revenue of about $450 million in 2021 and its narrow niche focus on ophthalmology,” the agency said in a press release.

The company’s pro forma capital structure will include a $15 million five-year revolving credit facility, undrawn at close, a $375 million seven-year senior secured first-lien term loan; and a $65 million delayed-draw first-lien term loan, undrawn at close.

Proceeds will be used to refinance debt and fund near-term acquisitions.

The outlook is stable.

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