UpHealth wraps Cloudbreak sale, $180 million proceeds will cut debt

By Mary-Katherine Stinson

Lexington, Ky., March 18 – UpHealth Inc. on March 15 completed the previously announced sale of its Cloudbreak Health, LLC business to newly formed entity controlled by GTCR LLC for $180 million in cash, according to a press release.

Proceeds will be used to pay down the company’s debt, including all its $115 million 2026 notes and $20 million of its $57.2 million 2025 notes. This will leave approximately $37 million of the 2025 notes outstanding, which will constitute the company’s entire long-term debt.

The proceeds of the Cloudbreak sale, after transaction-related fees and expenses, have been deposited into three escrow accounts: a notes escrow ($139 million), a tax escrow ($27 million) and a working capital escrow ($3 million).

Funds in the notes escrow will be released on approximately June 3, but no later than June 15.

Funds in the tax escrow will be used to satisfy the company’s 2024 tax liability. Funds in the working capital escrow will be used to satisfy any obligations resulting from a difference between Cloudbreak’s targeted and actual working capital as of closing. Any remaining funds in the tax and working capital escrow accounts will be used to repurchase more 2025 notes.

The digital health company is based in Delray Beach, Fla.

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