S&P Global Ratings assigned a corporate credit rating of B to Inovalon Holdings Inc.
The outlook on the rating is positive.
S&P said the rating on Inovalon reflects its increased leverage after the acquisition of ABILITY Network Inc. Pro forma the transaction, the rating agency expects adjusted leverage to increase to 7.2x.
The rating agency expects the company to delever as the EBITDA base grows and cost synergies are realized. It expects gross leverage to remain above 5.0x through 2019, up from leverage of 3.1x at Dec. 31, 2017.
S&P believes the positive outlook reflects the potential for the company to grow and generate meaningful cash flow, as well as the agency's expectation that Inovalon intends to focus on leverage reduction in the near term and that further large-scale acquisitions are unlikely until ABILITY is fully integrated.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.