S&P shifts ModivCare view to negative

S&P said it changed ModivCare Inc.’s outlook to negative from stable and affirmed its B+ issuer rating.

ModivCare plans to acquire CareFinders Total Care LLC and VRI Intermediate Holdings LLC for a total of $655 million, which is expected to be funded with cash, the revolving credit facility and $400 million of new senior unsecured notes.

“We expect pro forma adjusted debt to EBITDA of about 5x in 2021, decreasing to about 4.5x in 2022, a deviation from our prior expectation for leverage to generally remain in the mid- to high-3x area,” S&P said in a press release.

The outlook reflects elevated credit metrics and the risk to the company's profitability over the next 12 months, the agency said.

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