- Shares of SelectQuote Inc. (SLQT) jumped nearly 30% in premarket trading after securing a $350 million investment from Bain Capital, Morgan Stanley Private Credit, and Newlight Partners, aimed at enhancing its healthcare services and consumer offerings.
- The infusion of capital is set to recapitalize SelectQuote’s balance sheet, lower debt servicing costs, and increase operational flexibility for growth, while also benefiting from a renegotiated credit facility with a reduced interest rate.
- Following this investment, SelectQuote reported strong Q2 earnings with adjusted EPS of $0.30, well above estimates, and raised its fiscal 2025 revenue guidance to $1.5 – $1.575 billion, reflecting optimism about future growth and strategic partnerships.
Shares of SelectQuote Inc. (SLQT) surged over 27%, reaching $5.57 in premarket trading on Tuesday after the company announced a significant $350 million strategic investment from a consortium including Bain Capital, Morgan Stanley Private Credit, and Newlight Partners. The insurance comparison platform said that this financial injection is poised to bolster its healthcare services business, enhancing partnerships with insurance carriers and offering more choice and value to consumers.
The investment aims not only to recapitalize SelectQuote’s balance sheet but also to reduce annual cash debt service costs, providing much-needed liquidity and operational flexibility to pursue growth initiatives. Alongside this, SelectQuote successfully renegotiated its Senior Secured Credit Facility, securing a lower interest rate on the remaining debt, which further optimizes its capital structure.
This strategic move is expected to accelerate SelectQuote’s efforts in refining its financial strategy, particularly in exploring accretive, strategic solutions with insurance carriers while expanding its healthcare services segment. The involvement of high-profile investors like Bain Capital and Morgan Stanley underscores the potential they see in SelectQuote’s business model, especially in a sector where consumer health and financial services are increasingly intertwined. This development marks an important moment for SelectQuote, particularly following the company’s earnings report on Monday. The report revealed a second-quarter adjusted earnings per share of $0.30 for the quarter ended December 31, significantly surpassing the consensus estimate of $0.09. Revenue increased by 18.7% year-over-year to $481.1 million, exceeding analyst projections of $441.5 million.
Looking ahead, SelectQuote raised its fiscal 2025 revenue forecast to $1.5 billion – $1.575 billion, surpassing the previous analyst consensus of $1.46 billion.
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