S&P rates Athletico loans B

S&P said it rated Athletico Holdings LLC’s planned $100 million revolving credit facility, undrawn at close, and $875 million first-lien term loan B with 3 recovery ratings. The 3 recovery rating indicates meaningful recovery (50%-70%; rounded estimate: 50%) in default. Concurrently, the agency affirmed Athletico’s B issuer rating.

Athletico agreed to acquire Pivot Health Solutions for $550 million, which it will do by refinancing its debt and employing $220 million of new sponsor equity.

“The acquisition strengthens Athletico's business, via an increase in scale (by about 50%, adding 250 PT clinics and 150 onsite services locations) and reducing its geographic concentration, including the revenue concentration in Illinois to about 44% of revenues (from 64%).The acquisition also enhances business diversification as Athletico will now offer onsite corporate health services, which is not exposed to traditional reimbursement risk and offers near- to medium-term revenue visibility (via three- to five-year contracts),” S&P said in a press release.

The outlook is stable.

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