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CHG Rated After $1.25 Billion Deal

October 26 2012

CHG Healthcare Services was assigned a B2 rating by Moody’s Investors Service in the wake of the proposed $1.25 billion leveraged buyout of the company by private equity firms Leonard Green & Partners L.P. and Ares Management LLC.

Moody’s also assigned $550 million in first-lien debt its “B1” rating and $215 million in second-lien debt its “Caa1” rating.

CHG’s outlook was rated as stable.

Among reasons for its rating, Moody's cited CHG’s degree of leverage, small size relative to other rated staffing companies, limited business line diversity and event risk associated with private equity ownership. On the other hand, “the rating benefits from the relative stability of the core locum tenens staffing business, CHG’s leading market position and track record of above-average growth in the locum tenens segment, the breadth of its physician specialty offerings and customer base and a good liquidity profile.”

CHG ranks as the largest provider of locum tenens staffing in the U.S. and the second-largest U.S. healthcare staffing firm overall.

Moody’s reported that CHG revenue for the last 12 months ended Sept. 30 was approximately $716 million.

Separately, Standard and Poor’s Ratings Services assigned CHG Healthcare Services Inc. its “B” corporate credit rating. The outlook is stable.

S&P also assigned CHG Buyer Corp.'s proposed $550 million first-lien credit a “B” issue-level rating and $215 million in second-lien debt its “CCC+” rating. 

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