Moody’s rates Safeguard, loans B3

Moody's Ratings said it assigned Safeguard Purchaser, LLC (Crisis Prevention Institute) a B3 corporate family rating and a B3-PD probability of default rating. The agency also assigned a B3 rating to CPI's U.S. subsidiary Crisis Prevention Institute, Inc.'s planned backed senior secured bank credit facilities consisting of a revolver and a term loan B.

“The B3 CFR and positive outlook is supported by the company's strong market position in the crisis de-escalation training market and good brand awareness among healthcare and educational end markets, very strong EBITDA margins that Moody's expects to be stable, a good track record of revenue growth that is underpinned by the ability to grow volume and price of programs and learning materials, and recurring revenue that is supported by certification renewals and continued education for certified instructors,” the agency said in a press release.

The ratings also illustrate, “CPI's small scale as measured by less than $200 million in annual revenue, narrow product scope, dependence on budgets of customers that include healthcare facilities and educational agencies and moderate leverage. Pro forma for the transaction Moody's estimates debt to EBITDA is 5.9x and expects leverage to decline to between 5.25x and 5.5x over the next 12-18 months, assuming no additional debt issuance.”

The proceeds of the $35 million revolver due 2029, undrawn at close, and the $400 million term loan maturing 2031 will be used to refinance indebtedness, fund a distribution to the shareholder and pay transaction-related fees and expenses.

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