Ares Management is reportedly leading a $2.2 billion direct loan to finance MedImpact Holdings' planned acquisition of Medical Card System, a Puerto Rico-based healthcare services company — according to Bloomberg, citing people familiar with the matter.
Deal Component | Details |
|---|---|
Lender | Ares Management |
Borrower | MedImpact Holdings, Inc. |
Acquisition target | Medical Card System, Inc. |
Facility Size | $2.2 billion |
Structure | Second-lien direct loan |
Pricing | At least 800 basis points (8 points) above benchmark rate |
Current owner of target | Kinderhook Industries |
Status | Discussions ongoing; terms not yet finalized |
MedImpact operates as a pharmacy benefits manager and is majority-owned by founder and CEO Frederick Howe. The financing would be structured as second-lien debt — meaning Ares and co-lenders would sit behind first-lien holders in repayment priority, which explains the elevated pricing relative to typical senior secured facilities.
Why It Matters
This deal lands at a notable moment for private credit. The asset class oversees roughly $1.8 trillion, but the market has faced sustained investor withdrawals this year amid concerns over underwriting discipline and exposure to software borrowers vulnerable to AI-driven disruption. With sponsor M&A activity running below historic norms, new financing volume has thinned — concentrating available deals into fewer, larger transactions where scale lenders like Ares can commit sizeable single-name positions.
Notably, this isn't Ares' only large healthcare financing in motion — the firm is separately working on a roughly £1 billion ($1.3B) debt package to support Toscafund Asset Management's possible takeover of UK-based Spire Healthcare Group.
Sources: Bloomberg, PitchBook
