Health Catalyst, a provider of data and analytics technology and services to healthcare organizations, entered into a five-year term loan facility for up to $225 million with Silver Point Finance, the direct lending business of Silver Point Capital. The financing consists of an initial term loan facility in an aggregate principal amount of $125 million and a delayed draw term loan facility in an aggregate principal amount of $100 million.
The credit facility closed on July 16, 2024, and Health Catalyst borrowed $125 million of the initial facility (constituting the entire amount thereof) on the closing date. The delayed draw facility remained undrawn as of the closing date. Health Catalyst has the option to draw up to $40 million under the delayed draw facility at any time on or prior to the date that is six months after the closing date, and up to an additional $60 million under the delayed draw facility at any time on or prior to the date that is 18 months after the closing date, in each case subject to certain terms and conditions.
The net proceeds of the initial facility, together with cash on hand, will be used to refinance Health Catalyst’s existing convertible notes, which mature in 2025, at any time at or prior to maturity, and for working capital and general corporate purposes. The proceeds of the delayed draw facility may be used to fund Health Catalyst’s inorganic growth strategy.
“This financing is an important milestone for Health Catalyst and its shareholders,” Dan Burton, CEO of Health Catalyst, said. “The credit facility not only assists with refinancing our existing convertible notes, but also provides flexibility and additional non-dilutive capital for us to continue to proactively pursue meaningful organic and inorganic growth opportunities, and to continue to act as a consolidation platform for our clients, integrating compelling technologies within our five areas of focus, which we believe positions us well to create client and shareholder value. We are pleased to have Silver Point as a long-term strategic financing partner as we continue our mission to be the catalyst for massive, measurable, data-informed healthcare improvement.”
“This financing represents a dynamic, flexible solution that allows Health Catalyst to refinance existing debt and fund growth initiatives in a non-dilutive way,” Jason Alger, chief financial officer of Health Catalyst, said. “Additionally, we believe that the structure of the financing, in particular the delayed draw feature, allows us to continue to pursue and finance our acquisition strategy as we continue to work on improving EBITDA and increasing our cashflow. This flexible structure, which we believe enables us to address our near-term convertible notes maturity in a non-dilutive fashion, allows us to focus on creating value for our shareholders, while maintaining a strong, flexible balance sheet.”
“We are pleased to partner with Health Catalyst and work closely with their team to develop a flexible financing solution that supports the company’s growth initiatives and enables the company to refinance their existing convertible notes,” Anthony DiNello, head of Silver Point Finance. “The company is at an exciting inflection point and we believe our capital allows Dan, Jason and the entire team the time, flexibility and dry powder to execute their plan.”
Lazard acted as sole placement agent and financial advisor to the company in connection with the credit facility, and Latham & Watkins acted as legal advisor to the company.
