Fitch assigns nThrive B, loan BB

Fitch Ratings said it assigned a long-term issuer default rating of B with a stable outlook to MedAssets Software Intermediate Holdings, Inc. (nThrive TSG). Fitch also assigned a senior secured first-lien term loan rating BB/RR1.

On Nov. 15, nThrive TSG agreed to be acquired by Clearlake Capital Group, LP for $1.115 billion. The acquisition will be financed with $750 million of new debt, including a $150 million preferred equity issuance and the balance provided by the sponsor’s equity contribution.

“Fitch expects nThrive TSG to experience consistent mid-single-digit organic growth through the forecast horizon as a result of strong secular trends in U.S. healthcare spending and utilization. The Centers for Medicare and Medicaid Services (CMS) forecasts national health expenditure growth of 5.6% per year through 2026 due to long-standing trends including an aging demographic, medical procedure/drug-cost inflation and utilization growth,” Fitch said in a press release.

Fitch forecasts initial pro forma leverage of 7.9x, well above the 6.25x and 5.6x median for Technology issuers in the B category and for Fitch-rated healthcare IT issuers, respectively. However, the agency said nThrive’s dependable growth prospects, strong margin profile, declining capital intensity, and low cyclicality support the leverage.

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