Rating Action: Moody’s assigns B2 rating in order to EyeCare Partners’ new pregressive first mortgage term loanGlobal Credit Research – 16 Aug 2022New York, August 16, 2022 — Moody’s Investors Service (“Moody’s”) assigned a B2 rating to be able to EyeCare Partners, LLC’s (“ECP”) proposed new $225 million incremental senior secured first lien term loan due November 2028. There are no changes to ECP’s existing ratings including the B3 Corporate Family Rating (CFR), the B3-PD Probability of Default Ranking (PDR), the first loan senior secured bank credit facility rating at B2, and the particular second note against it senior guaranteed bank credit score facility ranking at Caa2. The outlook remains stable. ECP has announced that it will be acquiring several eye care targets in the near future. ECP will be funding typically the transaction and adding cash to the balance sheet by raising a $225 million incremental initial lien phrase loan. In addition, ECP will also be repaying existing balances on its revolving credit rating facility. Pro forma for this transaction, Moody’s expect adjusted Debt/EBITDA to increase to close to 8x based on the last twelve months ending June 30, 2022. However, Moody’s expect leverage to decline towards 7x over this next 12 to 18 months reflecting earnings growth plus a smooth integration of these acquisitions. The acquisitions will also diversify ECP geographically. Assignments:.. Issuer: EyeCare Partners, LLC…. Senior Secured First Lien Term Loan, Assigned B2 (LGD3)RATINGS RATIONALEThe B3 CFR reflects ECP’s high leverage, aggressive growth strategy in addition to moderate geographic concentration within two states, Michigan and even Missouri, which would make ECP more susceptible to an economic downturn or additional impact from the coronavirus. Moody’s projects adjusted influence of approximately 8x debt/EBITDA (pro forma acquisitions) for the last twelve month ended June 30, 2022. Absent this gradual debt, influence has improved to 7. 3x for the last twelve months ended June thirty, 2022. Going forward, Moody’s expects power to decrease towards 7x by often the end associated with 2023 as growth continues and your acquisitions are usually fully integrated. Integration risk is a key issue because ECP offers been aggressive in development through acquisitions. In addition, while e-commerce penetration in the optical sector is likely to remain moderate, Moody’s expects that, over time, traditional optic retailers will face margin and market share pressure from growing online competition. The particular rating considers that while leverage is increasing, the exact additional scale supported through the acquisitions help somewhat offset the risks associated with the elevated leverage. Typically the acquisitions will also diversify ECP geographically. ECP benefits from the industry’s favorable long-term growth prospects, including growing demand with regard to optometrist together with ophthalmological services and eyewear products. ECP also owns ambulatory surgery centers, which will benefit through growing demand as patients and payors generally prefer the outpatient environment (primarily due for you to lower cost and additionally better outcomes) for certain specialty procedures, including cataract surgeries. The B3 CFR rating is further supported simply by Moody’s expectation that the company will maintain good liquidity over the next 12-18 weeks and generate positive free cash flow before expansion. Liquidity is further supported by simply ECP’s estimated $55 mil pro forma cash balance and full availability on its $200 million revolver due 2025 following at the close of the proposed refinancing. The B2 ratings regarding the company’s senior anchored credit facilities is one notch above the B3 CFR reflecting the level of junior capital provided by the second lien expression loan in the company’s capital structure. Social and governance risks usually are material to help ECP’s ratings. ECP was negatively impacted by the coronavirus pandemic, the social risk, as volumes declined at the height of the pandemic causing leverage to improve. Aside coming from coronavirus, ECP faces other social risks, such as the rising concerns around the access and affordability of healthcare services. However , Moody’s does not consider the particular eye care providers not to mention ASCs to face the same level regarding social risk as hospitals as ASCs are viewed as an affordable alternative in order to hospitals for elective procedures. From a governance perspective, Moody’s expects financial policies to be able to remain intense given private equity ownership. This stable perspective reflects Moody’s expectation that leverage will certainly decline towards 7x by the end of 2023 as progress continues and the acquisitions will be fully incorporated. The stable outlook furthermore reflects Moody’s favorable view of typically the longer-term prospects for vision care. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGThe rankings could end up being downgraded if revenue or even profitability weakens or in case the company fails for you to effectively manage its rapid growth. A downgrade could also occur if this company’s fluid weakens or perhaps if the carrier’s financial policies become more extreme or when adjusted debt/EBITDA is does not drop below seven. 5 times by often the end involving 2023. Often the ratings could be upgraded when the company demonstrates stable organic growth whilst effectively executing its expansion strategy. An upgrade would be supported by means of sustained, steady free income and debt to EBITDA that will be expected to get maintained below 6. 5 times. EyeCare Partners, LLC, headquartered inside St . Louis, Missouri, is usually the largest medically-focused eye care services provider. ECP is vertically integrated, providing optometry, ophthalmology and retail products. Professional forma for the acquisitions, ECP will have more than 750 locations across 18 states. For the last twelve months finished June 30, 2022, ECP generated $1. 4 billion of revenues. The principal methodology used in this rating has been Business and also Consumer Services published throughout November 2021 and available at https://ratings.moodys.com/api/rmc-documents/356424. Alternatively, please see the Rating Methodologies page upon https://ratings.moodys.com for a copy of this methodology. 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Your Global Scale Credit Rating about this Credit score Rating Announcement was released by among Moody’s affiliates outside often the UK plus is endorsed by Moody’s Investors Support Limited, One Canada Square, Canary Wharf, London E14 5FA under the law relevant to credit rating agencies in the UK. Further info around the UK endorsement status and your Moody’s office that given the credit rating is available on https://ratings.moodys.com. Please see https://ratings.moodys.com for any updates at changes to the lead ranking analyst and to the Moody’s legal business that features issued the exact rating. Please see the issuer/deal page regarding https://ratings.moodys.com pertaining to additional corporate disclosures for each credit score. Jean-Yves Coupin Vice President – Senior Analyst Corporate Finance Group Moody’s Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U. S. The. 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