The Carlyle Group purchased WellDyneRX in 2017 and its debt will need to be refinanced this year. Moody's isn't sure the refinancing will go well and placed WellDyneRX on review for possible downgrade for refinancing risk.
Moody's had this to say in February 2017 when Carlyle bought WellDyneRX.
"Despite its revised capital structure, WellDyneRx's leverage will remain very high, with pro-forma debt/EBITDA of roughly 6.7 times," said Diana Lee, a Senior Credit Officer at Moody's.
Ten days ago Moody's wrote:
The rating also reflects high, albeit declining financial leverage, with debt/EBITDA above 7x on Moody's basis.
Both reports show WellDyne had problems with a drug rebate aggregator. In 2017 the report shared:
Moody's concerns regarding downward revisions to earnings resulting from reporting errors related in part to a new rebate aggregator and a new client.
The 2022 concern impacted profits.
Profits faced significant contraction in 2020 due to challenges in collections from a rebate aggregator. The company has switched rebate aggregators, and Moody's does not anticipate another earnings step-down.
How much cash has Carlyle pulled from WellDyne as its sponsor via management fees, deal fees and special dividends? Carlyle sank healthcare affiliates ManorCare and LifeCare Hospitals. Will WellDyneRX join them in the PEU bankruptcy pile?
