LSCS Holdings Inc.

We project adjusted leverage of above 7x in 2022, improving to 6x-7x in 2023 from top-line growth and reduced acquisition-related spending. The company generated free cash flow deficits over the past few years, in part due to acquisition-related expenses. Although the acquisition and integration expenses for the InTouch deal are largely complete, we expect acquisitions to remain a key component of the growth strategy. We also expect modestly positive free cash flow generation over the next few years, though an EBITDA uplift in 2023 may be somewhat offset by higher interest expenses as benchmark rates increase. The stable outlook reflects our expectation for net revenue growth of a mid-teens percent, supported by a strong pipeline and the roll-off of non-recurring

...We expect robust demand for LSCS Holdings Inc.'s offerings to drive continued double-digit percent net revenue growth.. In the third quarter of 2022, the company's net revenue grew 14% (pro forma for acquisitions). We expect continued momentum in top-line growth as the growth has been broad-based across most of the company's segments, including Channel Services (15%), Deployment Solutions (21%), Agency (20%), Products (24%), and Value and Evidence (24%). We believe that pharmaceuticals companies will increasingly look to commercialization partners like LSCS to efficiently capitalize on growth opportunities. The company benefits from favorable industry tailwinds, such as increasing pharma outsourcing and the growth of specialty drugs. The company's small scale and niche focus make it vulnerable to competition, industry changes, and operational underperformance. LSCS has little room for challenges when integrating newly acquired companies due to its small EBITDA base and high leverage. Furthermore,...

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