FSIC lends to healthcare staffing company

The GSO-sub-advised BDCs placed a $150 million senior secured loan with T.H. Lee-backed Healthcare Staffing Services.  

Franklin Square Capital Partners’ business development companies have closed on a $150 million senior secured loan to Healthcare Staffing Services (HSS). Headquartered in Denver, HSS is a healthcare staffing firm that provides nursing staff to healthcare facilities across the US at short notice.

The financing was executed in conjunction with Thomas H. Lee Partners purchase of a majority equity stake in the company.

The financing was provided by the three Franklin Square BDCs, the public FS Investment Corporation (FSIC), and the private FSIC II and FSIC III vehicles, which are managed by affiliates of Franklin Square and sub-advised by Blackstone-owned GSO Capital Partners.

The tenor of the loan is six years and the investment was levered at 4x debt to equity, said Brad Marshall, senior managing director at GSO, who oversees origination for the BDCs. He declined to comment on the interest rate.

“The scale of our platform enables speed and surety of execution, which we believe serves as a competitive advantage and attracts both borrowers and financial sponsors,” said Michael Forman, chairman and chief executive of the BDCs.

“HSS displays strong credit fundamentals with a history of revenue growth and strong cash flow generation,” commented Marshall.

TH Lee announced its acquisition of the company at the end of last month. The acquisition was a secondary buyout from Altaris Capital Partners, which acquired the company last year.

The FSIC BDCs have also made at least four other investments in recent weeks including another healthcare deal: a $210 million loan to back Genstar Financial’s purchase of a stake in PSKW. The New Jersey-based pharmaceutical company is a provider of patient prescription medication assistance and reimbursement services.

Rogue Wave Software borrowed $167 million in senior debt. The financing facilitated Rogue’s acquisition of another software company, Zend Technologies. Louisville, Colorado-based Rogue Wave provides developers with tools to quickly build applications. Cupertino, California-based Zend deals in the end-to-end web and mobile application development and deployment. Rogue Wave announced its acquisition of Zend on 6 October. 

The FSIC BDCs also funded a $70 million senior loan to Harvey Industries, in which private equity firm Dunes Point Capital recently took a stake. The Massachusetts-based firm manufactures and distributes building products. 

Last week, several firms announced that Global Jet Capital, the aircraft lending and leasing operation that was set up last year with financing from the Franklin Square BDC, Carlyle Group and AE Industrial Partners, bought a $2.5 billion loan portfolio from the GE Capital Corporate Aircraft business in the Americas. Franklin Square hasn’t revealed its specific role in the deal. 

Philadelphia-based Franklin Square oversees management and capital raising on the BDCs, while GSO handles loan origination and investment oversight. The firm usually finances assets with capital from several of the BDCs, which are then held on Franklin Square’s balance sheet. The public FSIC vehicle has about $4 billion in assets. All three combined manage approximately $15 billion.  

GSO has $81 billion in assets under management across private closed-end funds, CLOs, credit hedge funds and other strategies.