Moody's rates MedData, loans B3

Moody's Investors Service said it assigned first-time ratings to FH MD Parent, Inc. (MedData), including a B3 corporate family rating, a B3-PD probability of default rating and a B3 rating to the company's planned senior secured bank credit facility, consisting of a revolving credit facility maturing in 2026 and a term loan due in 2028.

“MedData's B3 CFR reflects its modest size and high financial leverage, with just over $200 million of revenue and debt to EBITDA around 5.5 times for the LTM period ended March 31, 2021, pro forma for the DECO acquisition and proposed debt. MedData has a narrow operating scope focused in patient eligibility, complex payment review and patient engagement services, mostly on behalf of hospitals,” Moody’s said in a press release.

The proceeds will be used to repay all its debt, acquire DECO Recovery Management, for about $68 million and pay transaction-related fees and expenses. In February, MedData acquired RevClaims, LLC for $15.6mm. In April, the company sold its software business line for $3.5mm.

The outlook is stable, mirroring a forecast for strong demand and high customer retention, at least 5% organic revenue growth, EBITDA margins around 20% and good free cash flow generation, Moody’s said.

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