Research Update: Ensemble RCM LLC's New Loan To Fund Dividend Rated 'B'; Existing Ratings Affirmed; Outlook Stable

Ensemble, provider of technology-enabled, end-to-end revenue cycle management (RCM) services to hospitals and health systems, is proposing a $814 million incremental term loan to fund (with an additional $12 million of balance sheet cash) an $809 million shareholder dividend and pay transaction fees. The company has exceeded our expectations for revenue and EBITDA growth in 2023, and we are raising our expectations for 2024 and 2025 based on new contracts and improving profitability. Following the transaction, we expect S&P adjusted debt to EBITDA in the 7x range in 2024 and expect leverage will decrease to the 5-6x area in 2025. We are affirming our 'B' long-term issuer credit rating and issue-level ratings. We are also affirming the issue-level and recovery

...- Ensemble, provider of technology-enabled, end-to-end revenue cycle management (RCM) services to hospitals and health systems, is proposing a $814 million incremental term loan to fund (with an additional $12 million of balance sheet cash) an $809 million shareholder dividend and pay transaction fees. - The company has exceeded our expectations for revenue and EBITDA growth in 2023, and we are raising our expectations for 2024 and 2025 based on new contracts and improving profitability. - Following the transaction, we expect S&P adjusted debt to EBITDA in the 7x range in 2024 and expect leverage will decrease to the 5-6x area in 2025. - We are affirming our 'B' long-term issuer credit rating and issue-level ratings. We are also affirming the issue-level and recovery ratings on the company's outstanding debt. - We are assigning a 'B' issue-level rating and 3 (50%) recovery rating to the incremental term loan. - The stable outlook on Ensemble reflects our expectation that its S&P Global...

Research Update