Change Healthcare to keep funding innovation while deleveraging to 4x

By Devika Patel

Knoxville, Tenn., March 12 – Change Healthcare Inc. plans to keep investing in innovation, despite its plans to de-lever a half turn per year until reaching a 4x leverage ratio.

“Since the IPO, and including the IPO proceeds, we have de-levered a full turn down to 4.7x levered,” president and chief executive officer Neil de Crescenzo said at the virtual Barclays Global Healthcare Conference on Thursday.

“We’ve been clear with our investors that our target is to reduce our leverage to about 4x by the end of our FY 2021 and this is driven by the improved EBITDA performance as well as debt paydown.

“Because of our strong GAAP free cash flow – for FY 2020, we estimate for the full year our GAAP free cash flow will be about $250 million to $300 million – in the third quarter alone, we paid down about $150 million in debt.

“We’re going to continue to spend on investing in innovation, but I think it’s great to see that the strength of our business allows us to simultaneously invest in the de-levering on the order of about half a turn a year,” he said.

Change Healthcare is a Nashville, Tenn.-based health care technology company.

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