Research Update: ADMI Corp. Ratings Affirmed On Announced Acquisition Of CC Dental Implants Holding, LLC, Outlook Negative

ADMI Corp. ("ADMI") has announced its acquisition of CC Dental Implants Holding, LLC ("CC") for $1.135 billion. CC provides non-clinical business support services to ClearChoice Dental Implant Centers. ADMI will fund the acquisition with a $1.2 billion incremental first-lien term loan. Its revolver (undrawn at closing) will upsize to $250 million from $75 million. Pro forma for the transaction, we project ADMI's adjusted leverage will increase to the mid-7x area in 2021, from about 5.5x, before improving below 7.0x in 2022. Despite the increase in its leverage, we expect the company will continue to generate sufficient positive free cash flow to fund its de novo growth strategy. Therefore, we are affirming our 'B' issuer credit rating on ADMI Corp. and

...- ADMI Corp. ("ADMI") has announced its acquisition of ## Dental Implants Holding, LLC ("##") for $1.135 billion. ## provides non-clinical business support services to ClearChoice Dental Implant Centers. ADMI will fund the acquisition with a $1.2 billion incremental first-lien term loan. Its revolver (undrawn at closing) will upsize to $250 million from $75 million. - Pro forma for the transaction, we project ADMI's adjusted leverage will increase to the mid-7x area in 2021, from about 5.5x, before improving below 7.0x in 2022. Despite the increase in its leverage, we expect the company will continue to generate sufficient positive free cash flow to fund its de novo growth strategy. - Therefore, we are affirming our 'B' issuer credit rating on ADMI Corp. and our 'B' issue-level rating on its existing first-lien debt, including the upsized revolver. - At the same time, we are assigning our 'B' issue-level rating and '3' recovery rating to its new $1.2 billion incremental term loan. - The...

Research Update