Leading U.S.-based dental support organization (DSO), Heartland Dental LLC announced its intention to paydown debt and complete an M&A transaction using a cash injection by its financial sponsor KKR. Heartland also proposed extending the maturities of its revolving credit facility (RCF) and first-lien term loan to 2030 and 2032, respectively, in a transaction that could also reduce its interest rate. As a result of the transaction, we expect Heartland?s credit metrics to improve, with S&P Global Ratings-adjusted leverage of roughly 6.8x and free operating cash flow (FOCF)/debt of about 4%. At the same time, we believe Heartland?s operations have improved based on its successful execution of its growth strategy and the benefits of its industry leading scale. As a result,
