Research Update: PointClickCare Technologies Inc. Rating Lowered To 'B' On Acquisition, Higher Leverage; Off CreditWatch; Outlook Stable

Ontario, Canada-based health care technology company PointClickCare Technologies Inc. (PCC) plans to acquire Audacious Inquiry for $400 million to expand its customer network, funded with an incremental $400 million first-lien term loan. We expect adjusted debt to EBITDA of about 6.2x in 2022, an increase from our prior expectation in the 4x-5x range. Audacious is larger than our prior acquisition expectations and will reduce PCC's EBITDA in the first year. We lowered our ratings on PCC, including our long-term issuer credit rating to 'B' from 'B+'. We are also assigning a 'B' issue-level rating to the new first-lien term loan and a '3' recovery rating. We removed the ratings from CreditWatch, where we placed them Feb. 2, 2022, with negative

...- Ontario, Canada-based health care technology company PointClickCare Technologies Inc. (PCC) plans to acquire Audacious Inquiry for $400 million to expand its customer network, funded with an incremental $400 million first-lien term loan. - We expect adjusted debt to EBITDA of about 6.2x in 2022, an increase from our prior expectation in the 4x-5x range. - Audacious is larger than our prior acquisition expectations and will reduce PCC's EBITDA in the first year. - We lowered our ratings on PCC, including our long-term issuer credit rating to 'B' from 'B+'. We are also assigning a 'B' issue-level rating to the new first-lien term loan and a '3' recovery rating. We removed the ratings from CreditWatch, where we placed them Feb. 2, 2022, with negative implications. - The outlook is stable, reflecting our belief that PCC's adjusted debt to EBITDA will generally remain in the 5x-7x range from healthy organic growth and additional debt-funded acquisitions....

Research Update