Research Update: DTI Holdco (Epiq) Downgraded To 'CCC+' On Economic Fallout From Coronavirus; Outlook Negative

The spread of COVID-19 is having significant implications across the legal process outsourcing sector. We expect U.S. court systems closures, delayed new case filings or trail timelines, or business challenges of its key customers will likely cause revenue to slow down. The industry sector has a poor history of timely accounts receivable collections and the company's modest liquidity profile provides limited cushion if its key corporate customers or law firms further delay payments. The company suffered a cyber attack on Feb. 29, 2020, which brought their systems offline for an extended period, with additional risk of customer defection and reputational damage. As announced on March 26, 2020, we lowered our ratings on Epiq, including our issuer credit rating to 'CCC+'

...- The spread of COVID-19 is having significant implications across the legal process outsourcing sector. - We expect U.S. court systems closures, delayed new case filings or trail timelines, or business challenges of its key customers will likely cause revenue to slow down. - The industry sector has a poor history of timely accounts receivable collections and the company's modest liquidity profile provides limited cushion if its key corporate customers or law firms further delay payments. - The company suffered a cyber attack on Feb. 29, 2020, which brought their systems offline for an extended period, with additional risk of customer defection and reputational damage. - As announced on March 26, 2020, we lowered our ratings on Epiq, including our issuer credit rating to '###+' (see "Various Rating Actions Taken In Business Services Sector". - The negative outlook reflects our expectation we will lower the rating if prolonged business disruptions or U.S. recession results in sharp revenue...

Research Update