Franklin Square makes $52m loan to healthcare firm

 The second lien financing for National Surgical Healthcare refinances debt as well as supporting acquisitions.  

 The FS Investment Corporation business development companies have provided a $52.5 million second lien senior secured note to National Surgical Healthcare (NSH), owner and operator of surgical hospitals and ambulatory surgery centers in the US. Chicago-based NSH is a portfolio company of Irving Place Capital, a private equity firm in New York.

The loan supports the acquisition of a majority stake in Optim Healthcare, a provider of general and specialty healthcare services by NSH as well as refinancing some debt. The transaction also backs NSH’s increased equity stake in one of its existing surgical facilities.

The financing was arranged by FSIC’s three main business development companies, of which one is publicly traded. The BDCs are managed by Philadelphia-based Franklin Square Capital Management and sub-advised by GSO Capital Partners.

“NSH exhibits consistent revenue growth, strong free cash flow characteristics and clinical excellence,” Brad Marshall, senior managing director at GSO, said in a statement. “We believe that given its unique operating model focused on non-emergency scheduled procedures, combined with exceptional patient outcomes, the company is well positioned to further expand its healthcare footprint,” he added.

The publicly traded FSIC vehicle has about $5 billion in assets under management and focuses largely on senior secured transactions. Overall, the BDCs handle about $14 billion and the two private vehicles will eventually be rolled into the public one.