Research Update: Refficiency Holdings LLC 'B-' Ratings Affirmed On Proposed $417.8 Million Add-On Debt And Acquisitions; Outlook Stable

California-based commercial heating, ventilation, air-conditioning (HVAC), and mechanical, electrical, and plumbing (MEP) services provider Refficiency Holdings LLC (d/b/a Therma) plans to issue a $350 million incremental first-lien term loan and a $142.8 million delayed-draw term loan, and intends to upsize its revolving credit facility to $90 million (undrawn at close) from $75 million. The company will use $350 million of incremental financing to fund the purchase of three tuck-in acquisitions, resulting in a jump in pro forma revenue to about $1 billion and rise in S&P Global Ratings-adjusted EBITDA to over $135 million in 2022. Despite our expectation for cash flow deficits in 2021 and that adjusted leverage will remain above 6.5x through 2022, we expect Therma to maintain a

... air-conditioning (HVAC), and mechanical, electrical, and plumbing (MEP) services provider Refficiency Holdings LLC (d/b/a Therma) plans to issue a $350 million incremental first-lien term loan and a $142.8 million delayed-draw term loan, and intends to upsize its revolving credit facility to $90 million (undrawn at close) from $75 million. - The company will use $350 million of incremental financing to fund the purchase of three tuck-in acquisitions, resulting in a jump in pro forma revenue to about $1 billion and rise in S&P Global Ratings-adjusted EBITDA to over $135 million in 2022. - Despite our expectation for cash flow deficits in 2021 and that adjusted leverage will remain above 6.5x through 2022, we expect Therma to maintain a solid liquidity profile and benefit from enhanced services and delivery capabilities from its improved scale. - We affirmed our ratings on Therma, including our 'B-' issuer credit rating and first-lien debt...

Research Update