OLDWICK, N.J.--()--A.M. Best Co. has placed under review with developing implications the financial strength rating of B++ (Good) and issuer credit rating of “bbb+” of Western Dental Services Inc. (WDS) (Orange, CA).
These rating actions follow the recent announcement that New Mountain Partners III (New Mountain) has acquired Premier Dental Services, Inc. (PDS). WDS is a wholly owned subsidiary of the holding company, Premier Dental Holdings, Inc. (PDH), which in turn is owned by PDH’s parent holding company, PDS. The financing of the transaction includes the issuance of debt in the amount of $300 million by PDS, due 2018.
The under review status reflects A.M. Best’s uncertainty with New Mountain’s future strategic plans for PDS and WDS as well as the need for additional financial information from New Mountain. The ratings will likely remain under review pending further discussions with the management at both New Mountain and WDS regarding future plans and the potential impact on WDS’ operation. Moreover, A.M. Best remains concerned about the highly leveraged capital structure and debt service requirement at PDS, which is primarily serviced by WDS, placing added pressure on WDS to maintain strong operating results.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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