What's Happening to Healogics
(January 14, 2021) CDRH Parent, Inc.'s ("Healogics") Caa3 CFR reflects its unsustainably high leverage, deteriorating liquidity stemming from its weak operating performance, and approaching debt maturities in 2021. The credit profile is also constrained by Healogics' declining volumes in wound care centers and hyperbaric oxygen treatments, as well as the company's narrow focus on wound care management. These operating pressures constrain Healogics' ability to reduce leverage to a more manageable level prior to the company's need to address its 2021 debt maturities.1 (three months)
Healogics first-lien revolver matures in April 2021, while its first-lien term loan matures in July 2021.2
Healogics' liquidity profile is weak due to low profitability and ongoing negative free cash flow. At September 30, 2020, the company had approximately $40 million in cash and had no availability remaining under its $82.5 million revolving credit facility, expiring in July 2021. Furthermore, if on April 1, 2021 more than $100 million of first lien term loans remain outstanding then the maturity date of the revolving credit facility shall be April 1, 2021. Finally, the aggregate principal amount of $514 million of senior secured first lien term loan will come due on July 1, 2021.3
President & CEO at Independent Executive
1 年As the original Founder of National Healing in 1995 the precursor to Healogics I did the heavy lifting to get our first 50 centers ! We were innovators and built competitive advantage ! My vision was disease management and I signed my first Diabetes Center before I left the company to enhance wound care ! I had a deal with Morgan Stanley which was rejected in 1999 then acted on in 2005 after I left ! I recruited Bill Ennis as medical Director in 1996 and Ken Rideout in business development ! Bill is still there ! They buried my founder status and others took credit , however they never had my creativity or innovation to maintain leadership ! I warned CD&R they were over paying by at least double and they did not listen ! End of story !
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3 年Too bad.. a lot of good people work at Healogics. ??
Premium Hyperbaric Service, Sales & Parts
3 年Truth! They also try to control the hyperbaric equipment and service market by monopolizing the industry and using Sechrist to strong arm clients into keeping in contract by leveraging equipment leases and service costs. Bullies all around. (Sechrist and Healogics are one in the same company) Confict of interest for the client.
Clinic trial specialist & epidemiologist
3 年Loved the cover pic Jim.
Founder and CEO of FloodGate Medical - Talent Acquistion and Retention Solutions for Amazing Med Device companies
3 年Wow! Knew it was bad, but didn't realize the severity!