Providence Announces Pricing of Its $500 Million Private Offering of Senior Notes

The Providence Service Corporation (“Providence”) (Nasdaq: PRSC), today announced the pricing of the previously announced private placement offering and has agreed to issue and sell $500 million in aggregate principal amount of senior notes due on November 15, 2025, which will bear interest at a rate of 5.875% per annum (the “notes”). Completion of the notes offering is expected to occur on November 4, 2020, and is subject to, among other things, standard closing and market conditions.

Providence intends to use the proceeds from the notes, together with borrowings under its credit facility and cash on hand, to (i) pay the consideration in connection with the acquisition of OEP AM, Inc., a Delaware corporation, doing business as Simplura Health Group (“Simplura” and, together with its subsidiaries, the “Simplura Group”), (ii) repay in full substantially all debt for borrowed money of the Simplura Group (together with the termination of all commitments and the release and discharge of all security interests and guarantees related thereto), and (iii) pay fees and expenses incurred in connection with the transactions.

Providence intends to deposit the gross proceeds of the offering into a segregated escrow account until the date that certain escrow release conditions are satisfied. Among other things, the escrow conditions include the consummation of the acquisition of the Simplura Group. Prior to the satisfaction of the escrow release conditions, the notes will not be guaranteed and will be Providence’s senior secured obligations, secured by a first-priority security interest in the escrow account and all deposits and investment property therein. Following satisfaction of the escrow release conditions, the notes will be jointly and severally and unconditionally guaranteed on a senior basis by certain of Providence’s then current and future wholly owned domestic restricted subsidiaries, including certain of the Simplura Group entities.

The notes will be Providence’s senior unsecured obligations and will rank senior in right of payment to all of Providence’s future subordinated indebtedness, rank equally in right of payment with all of Providence’s existing and future senior indebtedness, be effectively subordinated to any of Providence’s existing and future secured indebtedness, including indebtedness under Providence’s credit facility, to the extent of the value of the assets securing such indebtedness, and be structurally subordinated to all of the existing and future liabilities (including trade payables) of each of Providence’s non-guarantor subsidiaries.