R1 RCM announces conversion agreement with Ascension, TowerBrook

R1 RCM announced that it has entered into an agreement with TCP-ASC ACHI Series LLLP, an investment vehicle jointly owned by Ascension Health Alliance and investment funds affiliated with TowerBrook Capital Partners, for the conversion of all of the 8.00% Series A Convertible Preferred Stock held by the joint investment vehicle to common stock. The Preferred Stock, issued in February 2016, was entitled to 8.0% annual payment-in-kind ("PIK") dividends until February 2023, followed by perpetual 8.0% annual cash dividends, and was not redeemable by R1. As part of the conversion agreement, the joint investment vehicle will receive approximately 139.3M shares of common stock and a one-time $105M cash payment. R1 intends to fund the cash payment with cash from its balance sheet. Pro forma for the conversion of the Preferred Stock, Ascension and TowerBrook, through the joint investment vehicle, will collectively own approximately 54%1 of R1's outstanding shares of common stock. The transaction is expected to close later this month, and all the shares of common stock to be issued as part of the transaction will be subject to a one-year lock up scheduled to expire in 2022. Ascension and TowerBrook will retain their seats on R1's Board of Directors.