Focus Financial Partners Announces Launch of New 7-Year Term Loan Tranche in Anticipation of Record Acquisition Volume

Rhea-AI Summary

Focus Financial Partners (NASDAQ:FOCS) announced plans to add a $800 million tranche to its First Lien Term Loan, targeting a 3.5x to 4.5x net leverage ratio. The new 7-year tranche, which includes a $400 million delayed draw feature, is expected to close in early July. Proceeds will pre-fund anticipated acquisitions. Current outstanding balances under the Term Loan are approximately $1.6 billion. Focus is optimistic about its record M&A pipeline while exercising capital allocation prudence.

Positive

• Record levels of M&A pipeline in the U.S. and internationally, indicating growth potential.
• Proceeds from the loan will enable pre-funding of future transactions, supporting strategic expansion.

Negative

• Dependence on debt financing could pose risks if cash flow generation declines.
• Market uncertainties, particularly related to COVID-19, may impact future acquisition activity.

Reaffirms 3.5x to 4.5x Net Leverage Ratio Target

NEW YORK, NY / ACCESSWIRE / June 17, 2021 / Focus Financial Partners Inc. (NASDAQ:FOCS) ("Focus"), a leading partnership of independent, fiduciary wealth management firms, announced today that it is launching a transaction to add a 7-year $800 million tranche to its First Lien Term Loan ("Term Loan"), inclusive of a $400 million six-month delayed draw feature. Focus expects to close this transaction in early July and use the proceeds to pre-fund the transactions it anticipates closing over the next several quarters. On June 17, 2021, the balances outstanding under Focus' Term Loan and $650 million First Lien Revolver were approximately $1.6 billion and $0, respectively.

"We are taking advantage of the favorable credit and interest rate environment to increase our dry powder while adding a 7-year tranche to our Term Loan," said Jim Shanahan, Chief Financial Officer of Focus. "Our M&A pipeline is at record levels, both in the U.S. and internationally, and we anticipate that this momentum will continue. Connectus also has a robust pipeline and continues to gain traction globally. Our core value proposition of entrepreneurship, permanent capital and value-added services is uniquely resonating in the highly fragmented wealth management industry. However, we remain highly selective in our approach to allocating capital. We will continue to prudently manage our balance sheet and maintain our targeted net leverage ratio range of 3.5x to 4.5x. In addition, our strong cash flow generation limits our reliance on debt as we grow our business, and we can use equity as acquisition consideration for select transactions."

About Focus Financial Partners Inc.
Focus Financial Partners Inc. is a leading partnership of independent, fiduciary wealth management firms. Focus provides access to best practices, resources, and continuity planning for its partner firms who serve individuals, families, employers and institutions with comprehensive wealth management services. Focus partner firms maintain their operational independence, while they benefit from the synergies, scale, economics and best practices offered by Focus to achieve their business objectives. For more information about Focus, please visit www.focusfinancialpartners.com.

Cautionary Note Concerning Forward-Looking Statements
This release contains certain forward-looking statements that reflect Focus' current views with respect to certain current and future events. These forward-looking statements are and will be, subject to many risks, uncertainties and factors relating to Focus' operations and business environment, including, without limitation, uncertainty surrounding the current COVID-19 pandemic, which may cause future events to be materially different from these forward-looking statements or anything implied therein. Any forward-looking statements in this release are based upon information available to Focus on the date of this release. Focus does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any statements expressed or implied therein will not be realized. Additional information on risk factors that could affect Focus may be found in Focus' filings with the Securities and Exchange Commission.

Investor and Media Contact
Tina Madon
Senior Vice President
Head of Investor Relations & Corporate Communications
Focus Financial Partners
P: +1-646-813-2909
tmadon@focuspartners.com

SOURCE: Focus Financial Partners

View source version on accesswire.com:
https://www.accesswire.com/652041/Focus-Financial-Partners-Announces-Launch-of-New-7-Year-Term-Loan-Tranche-in-Anticipation-of-Record-Acquisition-Volume

FAQ

What is the purpose of Focus Financial Partners' $800 million tranche?

The tranche aims to pre-fund anticipated acquisitions as part of a robust M&A strategy.

When does Focus Financial Partners expect to close the new loan transaction?

Focus expects to close the transaction in early July.

What is the current leverage ratio target for Focus Financial Partners?

The company reaffirms a net leverage ratio target of 3.5x to 4.5x.

How much is the outstanding balance on Focus Financial Partners' Term Loan?

The current outstanding balance under Focus' Term Loan is approximately $1.6 billion.

What challenges could affect Focus Financial Partners' acquisition strategy?

Market uncertainties, particularly those related to the ongoing COVID-19 pandemic, could impact acquisition plans.