Focus Financial Partners Increasing Term Loan to Repay Revolver Balance and Reset Dry Powder in Anticipation of Strong M&A Momentum in 2021

Rhea-AI Summary

Focus Financial Partners (NASDAQ:FOCS) announced a $375 million increase in its First Lien Term Loan, set to close in January 2021. The funds will be used to repay outstanding debts under its $650 million Revolver, maintaining existing terms. As of December 31, 2020, Focus had approximately $1.13 billion in Term Loan and $380 million under Revolver. CFO Jim Shanahan highlighted strong M&A momentum and a robust pipeline from partner firm Connectus as drivers for growth while emphasizing prudent balance sheet management.

Positive

• Increasing Term Loan by $375 million enhances liquidity for M&A activities.
• Strong cash flow generation supports optimized use of debt.
• Partner firm Connectus expected to expand its global footprint in 2021.

Negative

• None.

NEW YORK, NY / ACCESSWIRE / January 19, 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 increase the size of its First Lien Term Loan ("Term Loan") by $375 million. Focus expects to close this transaction in January 2021 and use the proceeds to repay outstanding borrowings under its $650 million First Lien Revolver ("Revolver"). There will be no change to the existing terms of the Revolver as a result of this reduction in borrowings. As of December 31, 2020, the balances outstanding under Focus' Term Loan and Revolver were approximately $1.13 billion and $380 million, respectively.

"We are taking advantage of the positive credit and interest rate environment to increase the borrowing capacity under our Revolver," said Jim Shanahan, Chief Financial Officer of Focus. "Our M&A momentum is strong, and we expect it only to increase this year as more of our partner firms accelerate their growth through mergers. Additionally, our partner firm Connectus has a robust pipeline and will further expand its global footprint in 2021. This transaction resets our dry powder, increasing our flexibility to capitalize on these dynamics. However, we continue to prudently manage our balance sheet and re-affirm our targeted net leverage ratio range of 3.5x to 4.5x. Our strong cash flow generation enables us to optimize our use of debt as we grow our business."

About Focus Financial Partners

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 focusfinancialpartners.com.

Cautionary Statement 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/624783/Focus-Financial-Partners-Increasing-Term-Loan-to-Repay-Revolver-Balance-and-Reset-Dry-Powder-in-Anticipation-of-Strong-MA-Momentum-in-2021

FAQ

What is Focus Financial Partners' recent loan transaction?

Focus Financial Partners is increasing its First Lien Term Loan by $375 million to repay outstanding borrowings and enhance liquidity.

When is Focus Financial Partners closing its loan transaction?

The loan transaction is expected to close in January 2021.

How much debt did Focus Financial Partners have as of December 31, 2020?

As of December 31, 2020, Focus Financial Partners had approximately $1.13 billion in Term Loan and $380 million under its Revolver.

What does the increase in Focus Financial Partners' Term Loan indicate?

The increase indicates a strategic move to capitalize on strong M&A momentum and improve cash flow management.

What financial metrics are Focus Financial Partners targeting after the loan increase?

Focus is maintaining a targeted net leverage ratio range of 3.5x to 4.5x.