Red IntermediateCo LLC

Overview Key strengths Key risks Secular post-COVID tailwinds due to rising employee medical costs and increased employer demand for preventative solutions. Adjusted leverage near the mid-teens for 2022. Revenue growth near 15% in fiscal 2022 supported by high net retention and recurring revenues. Weak operating cash flow projections in the near term due to growth-oriented investments. Well diversified across customers and end-markets. Financial sponsor ownership, which may preclude sustained deleveraging. Despite some softness over the course of the pandemic, Red IntermediateCo LLC (Virgin Pulse) has still achieved consistent revenue growth over the last four years. Revenues for the company grew roughly 1% in 2020, driven largely by discretionary spending cuts from many companies, as well as reduced on-site screenings arising

...Pro forma revenue growth of approximately 15% for 2022 with mid-single-digit growth thereafter. Despite some softness over the course of the pandemic, Red IntermediateCo LLC (Virgin Pulse) has still achieved consistent revenue growth over the last four years. Revenues for the company grew roughly 1% in 2020, driven largely by discretionary spending cuts from many companies, as well as reduced on-site screenings arising from social distancing restrictions. Revenues rebounded meaningfully in 2021, however, with organic growth in the high single digits, slightly exceeding previous S&P Global Ratings expectations. The company's solid topline performance has continued into 2022, with organic revenue growing in the mid-teen percent year over year for the first quarter, driven primarily by strong bookings. We forecast fiscal 2022 revenue to grow 30% as a direct result of the incremental revenue from...

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