Research Update: Pluto Acquisition I Inc. Outlook Revised To Positive Following Seasons Hospice Acquisition, 'B-' Ratings Affirmed

Dallas-based home health, personal care, and hospice services provider Pluto Acquisition I Inc. (doing business as AccentCare Inc.) is acquiring Seasons Hospice&Palliative Care, which we believe will substantially increase its exposure to hospice services and improve its geographic and payor diversity. AccentCare performed very well in 2020 and improved its adjusted EBITDA margins by several hundred basis points despite the effects of COVID-19 and its implementation of the new Patient-Driven Groupings Model (PDGM) reimbursement scheme in the first half of 2020. We are affirming our 'B-' issuer credit rating on AccentCare and revising our outlook to positive from stable based on our expectation for an improvement in its free cash flow to debt following the transaction. At the

...- Dallas-based home health, personal care, and hospice services provider Pluto Acquisition I Inc. (doing business as AccentCare Inc.) is acquiring Seasons Hospice & Palliative Care, which we believe will substantially increase its exposure to hospice services and improve its geographic and payor diversity. - AccentCare performed very well in 2020 and improved its adjusted EBITDA margins by several hundred basis points despite the effects of COVID-19 and its implementation of the new Patient-Driven Groupings Model (PDGM) reimbursement scheme in the first half of 2020. - We are affirming our 'B-' issuer credit rating on AccentCare and revising our outlook to positive from stable based on our expectation for an improvement in its free cash flow to debt following the transaction. - At the same time, we are assigning our 'B-' issue-level rating and '3' recovery rating to the company's proposed incremental first-lien facility and affirming our 'B-' issue-level rating on its outstanding first-lien...

Research Update