S&P rates Precision Medicine B-

S&P said it gave B- ratings to Precision Medicine Group Holdings Inc. and its first-lien facilities. The agency assigned a 3 recovery rating to the facilities.

“Our ratings on Precision Medicine Group reflect our view that the company's leverage is high (in the low-7x area in 2020), its cash flow generation after earn-out payments is minimal, and its scale is limited. We believe that under financial sponsor ownership, acquisitions will be a component of the company's growth strategy, keeping leverage at or above 6x,” the agency said in a press release.

The agency assigned a positive outlook. “Our positive outlook reflects our expectation of rapid growth and the potential for an upgrade in the next 12-18 months if cash flow generation improves, and we expect discretionary cash flow after earn-out payments will be sustained above $20 million and 3% of debt,” S&P said.

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