Research Update: Genuine Financial Holdings LLC 'B' Issuer Credit Rating Affirmed On Debt-Funded Buyout; Outlook Stable

Genuine Financial Holdings LLC (doing business as HireRight), provider of background screening services, will issue a $250 million fungible incremental first lien that, together with $26 million in balance sheet cash, will fund the buyout of the company by its two current financial sponsors, General Atlantic, L.P. and Stone Point Capital LLC. The transaction adds about 1.5 turns of S&P Global Ratings-adjusted leverage on a pro forma basis using 2023 year-end financials. However, we expect rapid deleveraging as the company's top line reverses to growth and cost savings strengthen margins. As a result, we affirmed our 'B' issuer credit rating on HireRight. Additionally, we affirmed our 'B' issue-level rating and '3' recovery rating on the company's first-lien credit facility. The

...- Genuine Financial Holdings LLC (doing business as HireRight), provider of background screening services, will issue a $250 million fungible incremental first lien that, together with $26 million in balance sheet cash, will fund the buyout of the company by its two current financial sponsors, General Atlantic, L.P. and Stone Point Capital LLC. - The transaction adds about 1.5 turns of S&P Global Ratings-adjusted leverage on a pro forma basis using 2023 year-end financials. However, we expect rapid deleveraging as the company's top line reverses to growth and cost savings strengthen margins. - As a result, we affirmed our 'B' issuer credit rating on HireRight. - Additionally, we affirmed our 'B' issue-level rating and '3' recovery rating on the company's first-lien credit facility. - The stable outlook reflects our expectation of organic revenue growth and margin expansion during 2024 such that leverage declines to the low-6x area by the end of 2024....

Research Update