DENVER - Modivcare Inc. (NASDAQ:MODV), a provider of integrated supportive care solutions, has completed a refinancing deal with a new $525 million term loan B, maturing in July 2031. The transaction, which closed on Monday, allows the company to redeem $500 million in senior notes due in November 2025 and enhances its financial flexibility.
The refinancing was oversubscribed, indicating strong interest from both current and new investors. Modivcare used the net proceeds to fully redeem the outstanding 5.875% senior unsecured notes. Additionally, lenders of $255 million of the company's $325 million revolving credit facility agreed to extend its maturity by an additional year to February 2028 and lowered the minimum liquidity covenant from $100 million to $75 million. The full revolving credit facility remains available to the company.
JPMorgan Chase (NYSE:JPM) Bank, N.A. led the refinancing process, with support from Modivcare's banking group. KKR Capital Markets LLC acted as Capital Markets Advisor, and legal counsel was provided by Gibson, Dunn & Crutcher LLP.
Modivcare, known for addressing social determinants of health, offers non-emergency medical transportation, personal care services, and remote patient monitoring. It also has a minority equity investment in Matrix Medical Network. This refinancing move is part of Modivcare's strategy to manage upcoming debt maturities and maintain shareholder value.
This financial maneuver is based on a press release statement from Modivcare Inc. and has not been independently verified.
In other recent news, ModivCare Inc. has seen significant developments. The company reported a 3% increase in its Q1 2024 revenue, reaching $685 million. However, it also noted a net loss of $22 million and an adjusted net loss of $1.2 million. ModivCare's adjusted EBITDA was in line with expectations at $32 million.
In the company's recent annual meeting, shareholders approved all proposed measures, including the election of six directors and the approval of executive compensation. KPMG LLP was ratified as the independent registered public accounting firm for the 2024 fiscal year.
ModivCare also secured $36 million in NEMT Annualized Contract Value in Q1 and anticipates monetizing its minority equity stake in Matrix Medical in late 2024 or early 2025. The company is also planning to refinance its 2025 senior unsecured notes to optimize capital costs and improve its balance sheet. Despite the negative impact from Medicaid redetermination on revenue and adjusted EBITDA, ModivCare remains confident in achieving its financial targets for 2024.
InvestingPro Insights
As Modivcare Inc. (NASDAQ:MODV) secures its financial position through a successful refinancing deal, investors and stakeholders may be keen to understand the company's current market dynamics and future expectations. With a market capitalization of $389.24 million, Modivcare is navigating the market with a noteworthy mix of challenges and opportunities.
InvestingPro data highlights a significant return over the last week, with a 9.43% price total return, reflecting a positive short-term investor sentiment. This is complemented by a strong return over the last three months, at 16.26%, suggesting a recovering trajectory in the recent quarter. However, the company's performance over the last six months and year-to-date figures show a more volatile journey, with returns of -32.52% and -37.74% respectively.
Despite the refinancing's aim to improve financial flexibility, Modivcare operates with a notable debt burden, as indicated by an InvestingPro Tip. Additionally, the company's short-term obligations exceed its liquid assets, which could pose liquidity risks. On a more positive note, analysts predict that the company will be profitable this year, offering a glimmer of hope for a turnaround in its financial performance.
For those interested in a deeper analysis, InvestingPro provides additional insights, including the fact that Modivcare is trading at a low revenue valuation multiple, which may appeal to value investors. Moreover, the company does not pay a dividend to shareholders, which could influence investment decisions for income-focused portfolios. For a comprehensive list of insights, there are 11 additional InvestingPro Tips available for Modivcare, which can be accessed with the use of coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
Investors may also note the company's next earnings date on August 1, 2024, which will provide further clarity on Modivcare's financial trajectory and the impact of the refinancing on its balance sheet and future growth prospects.
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