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SUBSEQUENT EVENT
 12 Months Ended
Dec. 31, 2021
Subsequent Events [Abstract]  
SUBSEQUENT EVENT SUBSEQUENT EVENTS
Acquisition
On January 9, 2022, Convey’s indirect wholly-owned subsidiary, D-M-S Holdings Parent, LLC (f/k/a Dragon Holdings Parent, LLC), a Delaware limited liability company (“Buyer”), entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Briggs Medical Service Company, a Delaware corporation (“Seller”), and D-M-S Holdings, Inc., a Delaware corporation (“Target”), pursuant to which, on the terms and subject to the conditions set forth in the Purchase Agreement, Buyer has agreed to acquire from Seller all of the issued and outstanding capital stock of Target (the acquisition of such capital stock, the “Acquisition”). Target provides a diverse portfolio of health, wellness and diagnostic products centered on home based care outcomes, and the Company intends to leverage the Target’s supply chain and logistics expertise to get high quality products to members faster and at a lower cost.
Pursuant to the terms set forth in the Purchase Agreement, Buyer will pay to Seller cash (i) upon consummation of the Acquisition, in an aggregate amount equal to $77,500,000, subject to certain adjustments for, among other things, Target’s cash, indebtedness and net working capital (the “Closing Purchase Price”) and (ii) if the Target achieves certain amounts of net revenue in calendar year 2022, up to an additional $15,000,000. A portion of the Closing Purchase Price will be deposited into an escrow account to be held by an escrow agent and released to Buyer or Seller, as applicable, following the final determination of any purchase price adjustment.
In connection with the Purchase Agreement, Buyer, as a wholly-owned subsidiary of CHS obtained debt financing commitments from Ares Capital Management LLC, PSP Investments Credit USA LLC and New Mountain Finance Advisers BDC, L.L.C. (in each case, acting through itself and/or its affiliates, the “Commitment Parties”) for the purpose of financing the Acquisition and paying fees and expenses related thereto. The Commitment Parties agreed to provide CHS with a first lien incremental term loan facility under CHS’s existing First Lien Credit Agreement in an aggregate principal amount of up to $78,000,000, on the terms and subject to the conditions set forth in a debt commitment letter.
On February 1, 2022, Buyer completed its acquisition of all of the issued and outstanding capital stock of the Target. The Acquisition was consummated pursuant to the Purchase Agreement. The Company is currently working on the initial accounting of the Acquisition; as such, the purchase price allocation and valuation have not yet been completed and revenue and costs impacts have not yet been determined.
On February 1, 2022, CHS entered into Amendment No. 5 (“Amendment No. 5”), by and among CHS, as borrower, Ares Capital Corporation, as administrative agent and collateral agent, and the term lenders party thereto, to the First Lien Credit Agreement, dated as of September 4, 2019, as amended to the date hereof (the “Credit Agreement”).
Amendment No. 5 amends the Credit Agreement to provide for, among other things, a first lien incremental term loan facility (the “2022 Incremental Term Loan Facility”) in an aggregate principal amount of $78,000,000. The proceeds of the term loans borrowed under the 2022 Incremental Term Loan Facility (the “2022 Incremental Term Loans”) were used to finance the Acquisition (as defined above) and pay fees and expenses related thereto. The 2022 Incremental Term Loans will mature on September 4, 2026, will bear interest at an annual rate equal to, at the option of the Borrower, (i) the LIBOR (as defined in the Credit Agreement) for the relevant interest period (subject to a floor of 0.75% per annum) plus 4.75% for Eurodollar Rate Loans (as defined in the Credit Agreement) and (ii) a base rate plus 3.75% for Base Rate Loans (as defined in the Credit Agreement), and will amortize at a rate of 1.00% per annum.
Current Market Volatility
Since December 31, 2021, the price of the Company’s common stock has declined. A sustained decrease in the price of the Company’s common stock is one of the qualitative factors to be considered as part of an impairment test when evaluating
whether events or changes in circumstances may indicate that it is more likely than not that a potential goodwill impairment exists. The Company will continue monitoring the analysis of the qualitative and quantitative factors used as a basis for the goodwill impairment test during fiscal year 2022.