Clearlake and Charlesbank to inject $175m into distressed Symplr
Private equity firms Clearlake Capital Group and Charlesbank Capital Partners have agreed to provide around $175m of preferred equity to healthcare software provider Symplr as part of a restructuring designed to shore up the company's finances and push out debt maturities, according to a report by Bloomberg.
Clearlake Capital Group and Charlesbank Capital Partners have agreed to invest $175 million in healthcare software firm Symplr as part of a restructuring plan to improve the company's financial situation and extend debt maturities, according to Bloomberg. The private equity firms have reached an agreement with multiple creditor groups on the proposed recapitalization and are seeking additional lender support.
As part of the deal, Clearlake and Charlesbank will defer interest payments on newly issued junior-ranking debt, allowing Symplr to conserve cash while addressing its financial difficulties. Second-lien lenders are expected to contribute $103.5 million through a first-out second-lien loan, ranking ahead of existing second-lien debt and available to other junior-ranking creditors.
The restructuring comes after months of negotiations between Symplr and its lenders, as the company's debt has traded at distressed levels due to concerns about the impact of artificial intelligence on the software sector. Symplr's debt has faced additional scrutiny, with its loans experiencing significant markdowns in the first quarter and Moody's downgrading the company's debt to junk status in July due to an increased risk of restructuring.
The proposed transaction would grant existing second-lien lenders a 100 basis point increase in their coupon, while the loan would have a combination of cash interest and payment-in-kind interest. Holders of Symplr's first-lien term loan, maturing in 2027, would also receive a 100 basis point coupon increase for extending the maturity by three years.
Creditors who do not participate in the exchange would be pushed to the bottom of Symplr's capital structure and lose certain covenant protections. Symplr's $1.2 billion first-lien term loan was recently trading at 71.4 cents on the dollar, down from around 78 cents in early March and 86.5 cents at the beginning of January. Its $290 million second-lien term loan, due in 2028, was trading at about 70 cents.
The companies involved did not provide comments, and Symplr did not respond to requests for comment.
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