The speculative-grade rating on Emergency Medical Services Corp. (EMSC) reflects Standard & Poor's Ratings Services' expectations that it will face ongoing exposure to reimbursement risk in both its ambulance transportation (American Medical Response, AMR) and physician staffing (EmCare) businesses (although reimbursement is stable in the near term), and high levels of uncompensated care that contribute to relatively thin operating margins. Notwithstanding these risks, we characterize the business risk as fair, given expectations of modest revenue growth, reflecting new contracts, acquisitions, and, to a smaller extent, same-store growth. Pro forma for the proposed leveraged buyout transaction by Clayton Dublier & Rice, we expect adjusted debt leverage to approximate 7x, and funds from operations (FFO) to adjusted debt of about 9%. The...
Companies mentioned in this report are:
- Envision Healthcare Corp.
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