R1 RCM eyes $1.04B add-on term loan B for Cloudmed acquisition

R1 RCM Inc. disclosed that on Jan. 9, the company entered into commitment letters with Barclays and J.P. Morgan that provide the company with a $1.04 billion incremental first-lien term loan B in connection with the company's planned $4.1 billion acquisition of Cloudmed, which is expected to close in the second quarter.

Net leverage is expected to be 2.7x at closing.

In December, Cloudmed completed a $240 million incremental first-lien term loan that was fungible with its existing covenant-lite first-lien term loan due October 2027 (L+425, 0.50% Libor floor) to fund the acquisition of par80.

In July 2021, R1 RCM obtained an amended and restated pro rata facility that included a $700 million term loan A and a $450 million revolver. Proceeds from the new facility were used in connection with the company's acquisition of VisitPay and to refinance existing debt.

Cloudmed, formerly known as Revint Solutions LLC and backed by New Mountain Capital, provides revenue integrity and recovery services to hospitals and health systems.

*The article was amended at 9:15 a.m. ET on Jan. 13 to reflect the correct lineup of the bank group and structure of the loan package.