Research Update: ScribeAmerica Intermediate Holdco 'B' Ratings Affirmed On Acquisition And First-Lien Term Loan Add-On; Outlook Stable

U.S.-based medical scribe services company ScribeAmerica Intermediate Holdco LLC recently acquired national scribe staffing company PhysAssist Scribes from Team Health for about $160 million, which the company funded with cash on hand and a $135 million add-on to its first-lien term loan. We expect that the company's adjusted leverage will increase to the mid-7x area in 2018 before declining below 5x in 2019, absent further business developments, due to a relatively rapid pace of EBITDA growth and the realization of a significant level of acquisition synergies. We are affirming our 'B' long-term issuer credit rating on ScribeAmerica and our 'B' issue-level rating on the company's first-lien debt. The stable outlook reflects our expectation that the company will organically increase its

...+ U.S.-based medical scribe services company ScribeAmerica Intermediate Holdco LLC recently acquired national scribe staffing company PhysAssist Scribes from Team Health for about $160 million, which the company funded with cash on hand and a $135 million add-on to its first-lien term loan. + We expect that the company's adjusted leverage will increase to the mid-7x area in 2018 before declining below 5x in 2019, absent further business developments, due to a relatively rapid pace of EBITDA growth and the realization of a significant level of acquisition synergies. + We are affirming our 'B' long-term issuer credit rating on ScribeAmerica and our 'B' issue-level rating on the company's first-lien debt. + The stable outlook reflects our expectation that the company will organically increase its revenue and expand its margins. In addition, we anticipate that its acquisition activity will be muted and limited to small internally funded tuck-ins, which will enable ScribeAmerica to maintain...

Research Update