Gainwell to launch $1.83 billion incremental term loan on Wednesday

By Sara Rosenberg

New York, Feb. 2 – Gainwell Technologies is scheduled to hold a lender call at 10 a.m. ET on Wednesday to launch a fungible $1.827 billion incremental first-lien term loan (B2//BB-), according to a market source.

J.P. Morgan Securities LLC is the lead on the deal.

Price talk on the incremental term loan is Libor plus 400 basis points to 425 bps with a 0.75% Libor floor and an original issue discount of 98.56, the source said.

The company’s existing first-lien term loan is priced at Libor plus 400 bps with a 0.75% Libor floor.

Proceeds will be used to help fund the acquisition of HMS’ capabilities focused on the Medicaid market, including solutions delivered to states and managed care organizations.

In December, HMS announced that it is being acquired by Veritas Capital for $37 per share in cash, or $3.4 billion. As noted above, Veritas-backed Gainwell Technologies will acquire the HMS capabilities focused on the Medicaid market, including solutions delivered to states and managed care organizations. Veritas-backed Cotiviti will acquire the HMS capabilities focused on the commercial, Medicare and federal markets.

Closing is expected in the first half of this year, subject to the approval of HMS shareholders and the satisfaction of customary conditions, including regulatory approvals.

Gainwell is a provider of solutions to the administration and operations of health and human services programs.

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