ModivCare announces $400 million private offering of senior notes

ModivCare Inc, today announced a private placement offering of $400 million in aggregate principal amount of newly issued senior notes maturing in 2029 (the “notes”), issued by ModivCare Escrow Issuer, Inc. (the “Escrow Issuer”), a Delaware corporation established to issue the notes. Completion of the offering is subject to, among other things, pricing and standard closing and market conditions.

ModivCare intends to use the proceeds from the notes to (i) pay the consideration in connection with the acquisition of VRI Intermediate Holdings, LLC (the “VRI Acquisition”), and (ii) pay fees and expenses incurred in connection with the VRI Acquisition.

The gross proceeds of the offering will be deposited into a segregated escrow account until the date that certain escrow release conditions are satisfied. The escrow conditions include the consummation of the VRI Acquisition and the merger of the Escrow Issuer into ModivCare, among other conditions precedent. Prior to the consummation of the VRI Acquisition and satisfaction of the escrow release conditions and pending the release of the escrowed property (if applicable), the notes will be secured by a first priority security interest in the escrow account and escrowed property. From and after the consummation of the VRI Acquisition and satisfaction of the escrow release conditions and following the release of the escrowed property (if applicable), the notes and the note guarantees will not be secured, and will be ModivCare’s and each of its then current and future wholly owned domestic subsidiaries’ (the “Guarantors”) senior obligations and will rank equal in right of payment with any of ModivCare’s and the Guarantors’ existing and future senior indebtedness, including indebtedness under ModivCare’s credit facility.

The notes and the note guarantees will rank senior in right of payment to any of ModivCare’s and the Guarantors’ existing and future indebtedness and obligations that are, by their terms, expressly subordinated to the notes and the note guarantees. The notes and related note guarantees will be effectively junior to all of ModivCare’s and the Guarantors’ existing and future secured indebtedness, including indebtedness under the credit facility, to the extent of the value of the collateral securing such indebtedness. The notes will also be structurally junior to all indebtedness of ModivCare’s subsidiaries that do not guarantee the notes.

The notes to be offered will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any other state securities laws. As a result, they may not be offered or sold in the United States or to any U.S. persons, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the notes will be offered only to persons reasonably believed to be “qualified institutional buyers” under Rule 144A of the Securities Act or, outside the United States, to persons other than “U.S. persons” in compliance with Regulation S under the Securities Act. A confidential offering memorandum for the notes will be made available to such eligible persons. The offering will be conducted in accordance with the terms and subject to the conditions set forth in such offering memorandum.

This news release is neither an offer to sell nor a solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. Business Wire