eHealthInsurance Services, a subsidiary of eHealth, a private online health insurance marketplace, has entered into a new $125 million asset-based revolving credit facility with Manulife | Comvest Credit Partners, a middle-market credit investment firm.
The credit facility provides favorable pricing (SOFR + 6.50%) compared to eHealth’s term loan provided by Blue Torch Finance and its lender group and carries a three-year maturity, delivering greater financial flexibility and longer-term stability. The credit facility also provides for a flexible borrowing base that can drive an increase in funding of up to $50 million at Manulife | Comvest’s option, enhancing access to capital as the company grows.
A portion of the proceeds from the credit facility was used to repay in full the approximately $70 million outstanding under the Blue Torch loan, as well as to pay certain fees and expenses related to the transactions. The company intends to use the remaining proceeds from the credit facility to support strategic growth initiatives, including investments in AI-driven capabilities and omni-channel technology and diversifying the company’s revenue base, and for general corporate purposes.
“This agreement is a significant step in strengthening eHealth’s capital structure and positioning the company for long-term success,” Derrick Duke, CEO of eHealth, said. “The favorable terms, extended maturity and flexible borrowing base provide us with the resources and agility to invest in AI-driven innovation, business diversification and other high-ROI opportunities. We are excited to partner with Manulife | Comvest, a firm with a proven track record of supporting middle-market companies, as we execute on our growth strategy.”
The company remains focused on further improving its capital structure beyond this new credit facility, including by addressing its convertible Series A preferred stock, while enhancing governance through the establishment of a strategy committee to support long-term planning and the evaluation of opportunities that enhance stockholder value. In connection with the credit facility, eHealth entered into an amendment to its investment agreement with the holder of its convertible Series A preferred stock, as described in eHealth’s Form 8-K filed with the Securities and Exchange Commission.
Guggenheim Securities served as financial advisor to the company.
