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Subsequent Events
 9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
Truist Amended Credit Agreement
On November 3, 2023, the Company entered into a Third Amendment to Amended and Restated Credit Agreement and Incremental Agreement (the “Credit Agreement Amendment”) with the banks and other financial institutions party thereto and Truist Bank, as administrative agent (the “Administrative Agent”), which amended the Amended Credit Agreement.
The Credit Agreement Amendment provided a new term loan to the Company in an aggregate amount of up to $300.0 million, with $180.0 million funded at the closing of the Credit Agreement Amendment, and $120.0 million available to be drawn by the Company as delayed draw loans during the six months subsequent to the closing of the Credit Agreement Amendment (collectively, the “New Term Loan”). The New Term Loan matures on November 3, 2028 (or such earlier date on which it is terminated in accordance with the provisions of the Amended Credit Agreement) and amortizes quarterly at 5% per annum for each of the first two years, 7.5% per annum for years three and four, and 10% per annum for year five. Proceeds of the New Term Loan will be used to refinance outstanding revolving loans under the Amended Credit Agreement and for certain permitted acquisitions and share repurchases. As of November 9, 2023, the Company made drawdowns of $280.0 million, of which $180.0 million was used to pay the outstanding amount borrowed on the revolving line of credit.
The Company will pay a quarterly ticking fee on the delayed draw portion of the New Term Loan in an amount equal to 0.375% per annum multiplied by the average daily unused portion of delayed draw maximum amount. The New Term Loan will be secured by substantially all assets of the Company and subsidiaries of the Company that are not designated as immaterial subsidiaries.
The New Term Loan bears interest at an annual rate equal to either, at the Company’s option, (a) the Term SOFR Reference Rate (as defined in the Credit Agreement Amendment), adjusted for any Term SOFR Adjustment (as defined in the Credit Agreement Amendment), plus a spread from 1.50% to 2.75%, as determined on a quarterly basis based on the Company’s leverage ratio, or (b) a base rate, plus a spread of 0.50% to 1.75%, as determined on a quarterly basis based on the Company’s leverage ratio.
The Credit Agreement Amendment also revised certain negative covenants in the Credit Agreement, providing the Company with additional baskets and increased flexibility with respect to restrictions on indebtedness, liens, investments, acquisitions and restricted payments. The Credit Agreement Amendment also updates to the definition of Consolidated EBITDA to include additional addbacks and to clarify certain components of the calculation thereof.
The Credit Agreement Amendment did not change the amount of the revolving line of credit under the Amended Credit Agreement (which remained at $400.0 million), the maturity date of the revolving line of credit (which remained June 16, 2026), or the rate of interest paid on the revolving line of credit (which remained subject to a spread based on the Company’s leverage ratio).
Share Repurchase
On November 6, 2023, the Company entered into a stock repurchase agreement with APC, pursuant to which the Company agreed to repurchase approximately $100 million of the Company’s common stock from APC. The Company intends to finance the share repurchase with borrowings under the Credit Agreement Amendment. APC is a consolidated affiliate of the Company of which Dr. Thomas Lam, the Company’s Co-Chief Executive Officer and President and a director, is the Chief Executive Officer and Chief Financial Officer and a director and stockholder; Dr. Kenneth Sim, the Company’s Executive Chairman, is Chairman and a director and stockholder; and Dr. Albert Young, the Company’s Chief Administrative Officer, is Senor Executive Vice President and a stockholder.
Community Family Care Medical Group IPA
On November 7, 2023, the Company and certain affiliates entered into an Asset and Equity Purchase Agreement with Community Family Care Medical Group IPA, Inc. (“CFC”), Advanced Health Management Systems, L.P. (“AHMS”) and the other parties thereto (the “CFC/AHMS Purchase Agreement”). Under the terms of the CFC/AHMS Purchase Agreement, subject to satisfaction of customary conditions: (i) certain affiliates of the Company will purchase all of the outstanding general and limited partnership interests of AHMS for an aggregate purchase price of $52 million, subject to customary adjustments, and (ii) an affiliate will purchase substantially all the assets of CFC for an aggregate purchase price of $113.8 million (consisting of $93.8 million in cash and 631,712 shares of common stock of the Company), subject to customary adjustments, plus the assumption of certain identified liabilities of CFC plus earnout payments in an aggregate amount of up to $15 million. The Company intends to finance these transactions with cash on hand, the Company’s stock, and borrowings under the Amended Credit Agreement. The CFC/AHMS Purchase Agreement includes customary representations, warranties, covenants, conditions and other agreements. The obligations of the parties to complete the transactions are subject to the satisfaction, or waiver, of customary closing conditions, including receipt of applicable regulatory approvals. It is currently anticipated that the purchase of the assets of CFC and the purchase of the outstanding partnership interests of AMHS will occur in two separate closings, both of which are currently expected to occur during the first calendar quarter of 2024. CFC is an independent medical practice association that has entered into agreements with organizations such as insurance companies, health plans, self-insured employers, government payers, health maintenance organizations, medical groups, independent practice associations and other third party payers for the arrangement of the provision of healthcare services to subscribers or enrollers of such plans. AHMS is engaged in the business of providing management, consulting, administrative and other support services to entities that provide or arrange for the provision of professional healthcare services.
In connection with these transactions, NMM has entered into a Stock Purchase Agreement, dated November 7, 2023, (the “I Health Purchase Agreement”), to purchase 25% of the outstanding shares of common stock of I Health, Inc. (“I Health”) and will have a call option to purchase the remaining outstanding shares of common stock of I Health. It is currently expected that the I Health Purchase Agreement closing will occur during the first calendar quarter of 2024. I Health is engaged in the business of providing management, consulting, administrative and other support services to entities that provide or arrange for the provision of professional healthcare services.