S&P gives B to KNS loan

S&P said it assigned a B issuer credit rating to KNS Holdco LLC (KNS). The outlook is stable.

At the same time, S&P assigned a B issue-level rating and 3 recovery rating to the company's first-lien credit facility. The 3 recovery rating indicates an expectation for meaningful (50%-70%, rounded estimate: 60%) recovery in the event of a payment default. The second-lien term loan is not rated.

KNS Acquisition Corp. (formerly Nutrisystem Inc.) has announced its acquisition of Direct Digital LLC (doing business as Adaptive Health) for $557 million and repayment of its existing debt. The proposed transaction will be funded, in part, with proceeds from first-lien credit facilities consisting of a $75 million revolving credit facility due in 2026 and a $557 million term loan due in 2028, as well as a $100 million second-lien term loan due in 2029. The combined company is owned by financial sponsor Kainos Capital.

“The B rating reflects KNS' niche product focus in weight management meal plans and nutritional supplements and its participation in the highly fragmented and competitive health and wellness industry,” S&P said in a news release.

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