Moody's assigned Inovalon Holdings Inc. a B2 corporate family rating and a B2-PD probability of default rating.
The rating agency also gave the company an SGL-2 speculative grade liquidity rating.
The outlook on the ratings looks stable.
Moody's said the rating reflects Inovalon's elevated financial and integration risk, emerging from the partially debt-funded takeover of Ability Network Inc., and its modest scale and customer concentrations, which are only partially tempered by Moody's expectation for continued earnings growth and more conservative financial policies.
The company's ratings are also supported by its position as a market leader, the recurring nature of its revenue streams, solid margins and a good liquidity profile as expected over the interim period, Moody's said.
The stable outlook reflects expectation that revenue will grow in the mid-single digits over the next 12 to 18 months, that Abillity will be successfully integrated, and that the company will direct free cash flow to permanent debt reduction.
Bowie, Md.-based Inovalon is a cloud-based platform company that serves the healthcare sector.