Moody’s rates Matrix loans B2, Caa2

Moody’s Investors Service said it gave a B2 rating to Matrix Parent, Inc.’s (Mobileum) first-lien senior secured credit facilities, which consist of a $55 million five-year revolver, undrawn at close, a $380 million seven-year term loan and a $100 million seven-year delayed-draw term loan, undrawn at close and with 18 month availability, and a Caa2 rating to the company's $160 million eight-year second-lien term loan.

The agency also assigned a first-time B3 corporate family rating and a B3-PD probability of default rating to Matrix.

“Matrix's B3 CFR reflects high leverage of over 8x debt/EBITDA (Moody's adjusted) on a pro forma basis at year-end December 31, 2021, small business scale, execution uncertainties following recent acquisition-fueled expansion and exposure to fragmented and competitive end markets. Moody's expects Matrix will grow its top line at near high single-digit rates given attractive growth across several of its end markets and the ability to better cross sell and upsell to existing customers with a more comprehensive product suite following several years of transformative acquisition activity,” Moody’s said in a press release.

Matrix’s parent, Matrix Holdings, Inc. will receive a strategic investment from H.I.G. Capital LLC and will be owned by H.I.G. and existing investor Audax Group. H.I.G., Audax and existing management will acquire the assets of Mobile Acquisition Corp. H.I.G. and Matrix management will take a majority stake in Mobile Acquisition with Audax keeping a significant minority investment. Mobile Acquisition will continue existing and will be a direct, wholly-owned subsidiary of Matrix and will remain in the structure as a guarantor.

The first-lien senior secured credit facilities, second-lien term loan, new cash equity and rollover equity will be used to finance the acquisition of Mobile Acquisition, with $15 million of cash going to the balance sheet for working capital purposes. The acquisition is expected to close after completion of this debt issuance.

The outlook is stable.

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