Moody's assigns Motus B3, loans B2

Moody's Investors Service said it assigned first-time ratings to Motus Group, LLC, including a B3 corporate family rating, B3-PD probability of default rating and B2 ratings to the planned $390 million senior secured first-lien term loan and $50 million revolving credit facility.

“Motus' B3 CFR reflects the company's very high leverage following the LBO by the financial sponsors. Pro forma for the transaction, Moody's adjusted leverage was 8.8x debt/EBITDA (excluding non-recurring expenses and stock-based compensation and expensing software development costs) as of July 31, 2021. On a cash EBITDA basis, that includes change in deferred revenue minus capitalized commission costs, leverage can be viewed as 8.1x debt/EBITDA. Moody's projects that revenue growth in the low teens percentage range, in line with historic growth rates, over the next 12 to 18 months, will allow Motus to reduce its cash adjusted leverage to around 7.5x,” the agency said in a press release.

The credit facilities, together with an unrated $135 million second-lien term loan and new cash equity from funds advised by Permira Advisers, LLC and Thoma Bravo, and the rollover equity from Thoma Bravo and management will be used to finance the acquisition of Motus.

The outlook is stable.

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