R1 RCM’s Conversion Agreement with Ascension and TowerBrook

Kirkland & Ellis served as legal advisor to R1 RCM, Debevoise & Plimpton LLP acted as legal counsel to the special committee, while Wachtell, Lipton, Rosen & Katz and Covington & Burling LLP served as legal advisors to Ascension and TowerBrook on the deal.

R1 RCM Inc. (NASDAQ: RCM), a leading provider of technology-enabled revenue cycle management services to healthcare providers, entered into an agreement with TCP-ASC ACHI Series LLLP, an investment vehicle jointly owned by Ascension Health Alliance (“Ascension”) and investment funds affiliated with TowerBrook Capital Partners L.P. (“TowerBrook”), for the conversion of all of the 8.00% Series A Convertible Preferred Stock held by the joint investment vehicle to common stock.

The Preferred Stock, issued in February 2016, was entitled to 8.0% annual payment-in-kind (“PIK”) dividends until February 2023, followed by perpetual 8.0% annual cash dividends, and was not redeemable by R1. As part of the conversion agreement, the joint investment vehicle will receive approximately 139.3 million shares of common stock and a one-time $105 million cash payment. R1 intends to fund the cash payment with cash from its balance sheet.

R1 RCM is a leading provider of technology-enabled revenue cycle management (RCM) services which transform and solve revenue cycle performance challenges across hospitals, health systems and group physician practices. Ascension is a faith-based, non-profit healthcare organization dedicated to transformation through innovation across the continuum of care. TowerBrook is an international investment management firm.

The Debevoise team was led by M&A partners William Regner and Jeffrey Rosen 8Picture) and included associates Erik Andren and Marisa Demko, capital markets partner Steven Slutzky and litigation partner Maeve O’Connor.

Involved fees earner: Erik Andrén – Debevoise & Plimpton; Marisa Demko – Debevoise & Plimpton; Maeve O’Connor – Debevoise & Plimpton; William Regner – Debevoise & Plimpton; Jeffrey Rosen – Debevoise & Plimpton; Steven Slutzky – Debevoise & Plimpton;

Law Firms: Debevoise & Plimpton;

Clients: R1 RCM – Special Committee;


Author: Ambrogio Visconti