S&P Global Ratings placed the ratings on BioScrip Inc., including the CCC+ issuer credit rating, on CreditWatch with positive implications after the company disclosed plans of a merger with Option Care Enterprises Inc.
The companies agreed to merge to create an independent provider of home and alternate site infusion services in the U.S. healthcare market.
Denver-based BioScrip is a provider of infusion and home care management solutions in the U.S. Option Care is a provider of home and alternate treatment site infusion services for acute and chronic patients in the U.S.
S&P Global Ratings said in its March 20 ratings release that it expects the merged entity to have a leading market share with just over 20% of the U.S. home infusion market, in a relatively fragmented landscape of competitors.
In addition, the rating agency expects the merger will generate material synergies and cost savings, and that the combined company will benefit from a stronger competitive position and a more diversified payor mix.
S&P Global Ratings said the CreditWatch placements on the issue ratings reflect its expectation that they will likely improve, subject to a review of the ultimate capital structure, including the proportion of secured and unsecured debt in the capital structure, the presence of any cross guarantees or structural subordination.
This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.