Zelis Holdings L.P.

The stable outlook reflects S&P Global Ratings' expectation that Zelis Holdings L.P.'s (d/b/a Zelis) differentiated end-to-end cost-containment and payment-solutions business model will continue to support positive operating performance over the next 12 months, with revenue growth near 30% and EBITDA margins between 34% and 35%, according to our calculations. We believe this will result in adjusted leverage of 6.0x-6.5x by year-end 2022 and EBITDA interest coverage above 2x over this time period. We could lower the ratings during the next 12 months if the company: Experiences business deterioration driven by an extended decline in claims volume through 2022, or Raises additional debt, resulting in pressure on profitability such that adjusted leverage is above 7x or EBITDA interest coverage falls below

...Zelis Holdings L.P. (d/b/a Zelis) provides the industry with market-leading technology to price, pay, and explain health care claims. The 2019 RedCard and 2021 Sapphire acquisitions help the company to bridge health care payer, provider, and consumer communications. Zelis' combination with RedCard supported the integration of health care management and payments to a customer base of 700 payers and 1.5 million providers nationwide. The Sapphire acquisition will enable the company to enter the consumer-facing health care market with approximately 87 million members and 60 health plans. Capital markets activity has weakened credit quality measures. With the recent acquisitions and the associated debt issuances in September 2019 and September 2021, S&P Global Ratings-adjusted financial leverage is expected to be 6.5x-7.0x at year-end 2021. We expect the company to reduce leverage to between 6.0x-6.5x by year-end 2022 given our expectation for revenue growth and required first-lien debt amortization....

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