Focus Financial Partners Closes New 7-Year Term Loan Tranche, Raising $800 Million in a Heavily Oversubscribed Transaction With a Substantial Increase in Participation by New Lenders

Rhea-AI Summary

Focus Financial Partners (NASDAQ:FOCS) has successfully closed a new $800 million tranche to its existing First Lien Term Loan. The initial $650 million has been drawn, with a further $150 million available on a delayed draw basis. This tranche will carry a LIBOR + 250 basis points interest rate, aiding the firm in pre-funding anticipated M&A transactions. Currently, the Term Loan balance stands at approximately $2.3 billion. Focus aims to increase its M&A activities significantly in the coming months, showcasing a robust pipeline and financial flexibility.

Positive

• Successfully closed an $800 million tranche to the First Lien Term Loan.
• Initial $650 million drawn with an additional $150 million available on a delayed draw.
• Term Loan balance increased to approximately $2.3 billion, enhancing financial capacity for M&A.
• Confidence in acceleration of M&A transactions supported by a record pipeline.

Negative

• The overall debt balance is increasing, which may lead to higher financial leverage.

NEW YORK, NY / ACCESSWIRE / July 1, 2021 / Focus Financial Partners Inc. (NASDAQ:FOCS) ("Focus"), a leading partnership of fiduciary wealth management firms, announced today that it has closed the transaction to add a 7-year, $800 million tranche to its existing First Lien Term Loan ("Term Loan"). Of this amount, $650 million was drawn today and the remaining $150 million is available on a six-month, delayed draw basis. The annual interest rate on the new tranche is LIBOR + 250 basis points with LIBOR subject to a 50 basis point floor, and the transaction priced at 99.25. Focus will use the proceeds to pre-fund the M&A transactions it expects to close over the next several quarters. Focus' Term Loan balance is approximately $2.3 billion as of today, exclusive of the $150 million delayed draw, compared to approximately $1.6 billion as of June 30, 2021. Focus' $650 million First Lien Revolver ("Revolver") is currently undrawn, and there were no changes to the terms of the Revolver or of the existing Term Loan as a result of the new tranche.

"Our M&A pipeline is at record levels and we believe that this pace of activity will increase further in the second half of 2021," said Jim Shanahan, Chief Financial Officer of Focus. "We expect to deploy capital this year significantly in excess of our historical levels as we accelerate the expansion of our partnership globally. We are adding excellent new partner firms as well as mergers on behalf of our existing partner firms and Connectus. We are attracting many of the highest performing firms in the industry who will benefit meaningfully from our scale advantages, as well as access to our permanent growth capital and value-added services. The oversubscription, together with the expansion of our lender base, further reinforce our industry-leading position and this new debt capital enhances our financial flexibility in a highly cost-effective manner. We continue to prudently manage our balance sheet and maintain our targeted net leverage ratio range of 3.5x to 4.5x."

About Focus Financial Partners Inc.

Focus Financial Partners Inc. is a leading partnership of 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 autonomy, 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 Inc.

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FAQ

What is the significance of Focus Financial Partners' new $800 million term loan?

The new $800 million term loan enhances Focus Financial Partners' financial flexibility, allowing for increased capital deployment towards anticipated M&A transactions.

How much of the new term loan has Focus Financial Partners drawn?

Focus Financial Partners has drawn $650 million from the new term loan tranche, with an additional $150 million available on a delayed draw basis.

What is the current balance of Focus Financial Partners' Term Loan?

The current balance of Focus Financial Partners' Term Loan is approximately $2.3 billion.

What interest rate is associated with the new term loan from Focus Financial Partners?

The interest rate on the new term loan tranche is LIBOR + 250 basis points, with LIBOR subject to a 50 basis point floor.

How does the new term loan impact Focus Financial Partners' M&A strategy?

The new term loan positions Focus Financial Partners to significantly accelerate its M&A activities, supported by a robust pipeline and access to growth capital.