(The following statement was released by the rating agency) Fitch Ratings-New York-07 January 2021: Fitch Ratings has assigned a Long-Term Issuer Default Rating (IDR) of 'B' with a Stable Outlook to MedAssets Software Intermediate Holdings, Inc. (nThrive TSG). Fitch has also assigned a senior secured first-lien term loan rating of 'BB'/'RR1'. Fitch's actions affect approximately $440 million of to-be-issued debt. A complete list of rating actions follows at the end of this release.

nThrive TSG is a provider of revenue cycle management $(RCM)$ software and services, defined as the administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue. The company provides its offerings in charge integrity, claims management, contract management, patient access, analytics and education through a cloud-hosted, multi-tenant software-as-a-service ("SaaS") platform. On Nov. 15, 2020, nThrive TSG entered into a definitive agreement to be acquired by Clearlake Capital Group, L.P. (Clearlake). Total purchase price of $1.115 billion represents approximately 12.1x LTM Sept. 30, 2020 pro forma adjusted EBITDA. Clearlake is an investment firm founded in 2006 operating across private equity and credit strategies with experience in the healthcare IT software sector. Key Rating Drivers Reliable Growth Trajectory: Fitch expects nThrive TSG to experience consistent midsingle-digit organic growth through the forecast horizon as a result of strong secular trends in U.S. healthcare spending and utilization. The Centers for Medicare and Medicaid Services $(CMS)$ forecasts national health expenditure growth of 5.6% per year through 2026 due to long-standing trends including an aging demographic, medical procedure/drug-cost inflation and utilization growth. In addition, increased regulatory burdens, claims processing complexity and pressures on provider profitability serve as strong tailwinds for continued software adoption by providers.

The company's growth prospects are further reinforced by strong retention rates that are supported by high switching costs that involve staff retraining, implementation costs, business interruption risks and reduced productivity when swapping vendors. Despite the strong tailwinds, Fitch expects growth to be somewhat limited relative to peers due to a fully penetrated end-market with cross-sell efforts as the primary mechanism for future growth. Fitch believes that the secular tailwinds and high switching costs produce a dependable growth trajectory that benefits the credit profile.

Low Cyclicality: Fitch expects nThrive TSG, which has maintained consistent growth though the current pandemic driven macro downturn, to continue to exhibit low cyclicality for the foreseeable future. Fitch believes the company will exhibit strong correlation to overall U.S. healthcare spend and utilization, which is highly non-discretionary and has experienced uninterrupted growth since at least 2000 according to CMS. As a result, Fitch believes the company will demonstrate a stable credit profile with little sensitivity to macroeconomic cycles.

Strong Recurring Revenue and Margin Profile: nThrive TSG's software offerings are delivered through a multi-tenant, single-instance cloud platform with 92% of revenue generated from subscription-based revenue and annual recurring revenue $(ARR)$ predominantly comprised of fixed-fee products. The high degree of recurring revenue promotes visibility and is further supported by 99% gross retention rates.

nThrive TSG's profitability compares well to peers with Fitch forecasting EBITDA margins of 41 - 42% over the ratings horizon, above the 32% average and near the top of the 13%-45% range for Fitch-rated HCIT peers. The strong margin profile is supported by a highly variable cost structure typical of software developers. Fitch believes the strong margins contribute to robust FCF potential and supports the ability to sustain elevated leverage.

High Leverage: nThrive TSG is being acquired by PE sponsor, Clearlake, in a deal valued at $1.1 billion, financed with $750 million of new debt, including a $150 million preferred equity issuance, and the balance provided by an equity contribution from the sponsor. Fitch calculates initial pro forma leverage of 7.9x, well above the 6.25x and 5.6x median for Technology issuers in the 'B' category and for Fitch-rated healthcare IT issuers, respectively. Fitch expects modest deleveraging due to the limited EBITDA growth opportunity with margins that already benchmark well relative to peers, forecasts for midsingle-digit revenue growth, and the PE ownership that is unlikely to promote voluntary debt repayment. As a result, Fitch forecasts minimal decline in leverage to 7.7x over the ratings horizon. However, Fitch believes the leverage is supported by the company's dependable growth prospects, strong margin profile, declining capital intensity, and low cyclicality.

Strategic Risks: Fitch believes nThrive TSG faces elevated risks in the pending transaction that seeks to carve out and separate the unit from the prior company, given the complexity and execution demands such a process typically creates. Management has taken several steps to mitigate this risk including, the separation of sales, marketing and G&A functions completed in early 2020, retention of all IT assets and vendor contracts, and the implementation of a TSA with the remaining company that promotes continuity.

Fitch also notes risk in the company's sales strategy targeting large hospital system customers with growth reliant primarily on cross-selling efforts with existing clients, followed by new logo growth. The go-to-market strategy positions nThrive in direct competition with larger RCM providers, such as Change Healthcare, Inc. and Experian Information Solutions, Inc., who could quickly scale up product investment and go-to-market efforts. In addition, large Electronic Health Records $(EHR)$ providers, such as EPIC or Virence, which was combined with athenahealth, Inc. in 2019, are thoroughly entrenched in hospital IT systems and may leverage their position and vertically integrate their software stack by expanding RCM capabilities. This risk is somewhat mitigated by the substantial switching costs involved in replacing an RCM vendor, evidenced by the company's historical retention rates near 100%.

Evolving Marketplace: nThrive TSG faces risks from a continually evolving healthcare marketplace including consolidation in large hospital systems and impacts from ongoing efforts to slow cost growth. Long-standing profitability pressures on hospitals has led to rising M&A activity as large systems combine or absorb smaller, independent hospitals. The trend may limit growth prospects as the target set of customers narrows, with Deloitte forecasting a 50% decline in existing systems by 2024, or may lead to increased churn as newly merged providers rationalize software platforms.

Additionally, nascent efforts to shift to value-based care, in which reimbursements are directed toward successful outcomes rather than toward volume of procedures, will likely require the company to re-examine its current go-to-market and pricing strategies. nThrive TSG will need to develop a pricing strategy that aligns more closely with the emerging incentives that are based on medical outcomes. Fitch believes that such a major shift in pricing strategy introduces a risk of disruption and rejection from the marketplace that may result in decreased growth. However, Fitch notes that the transition to value-based case is also slow-moving and any impacts are outside of the ratings horizon. Derivation Summary Fitch is evaluating nThive TSG pending its transaction to be acquired by private equity sponsor, Clearlake Capital. Fitch believes the company benefits from a favorable growth opportunity as processing volumes continue to expand due to long-standing trends in the US healthcare industry including, an aging demographic, medical procedure/drug cost inflation and utilization growth. In addition, the company exhibits strong revenue growth prospects by leveraging its platform that addresses the increased regulatory burdens, claims processing complexity and profitability pressures to generate significant cross-selling opportunities in the existing client base. Fitch believes growth is further ensured by a high degree of recurring revenue, strong client-retention rates, high switching costs and robust sales efforts. Finally, similar to the company's continued positive organic growth during the pandemic-led downturn, Fitch expects the company to demonstrate minimal cyclicality and durable resistance to economic cycles due to the non-discretionary nature of healthcare spend.

While Fitch views the high visibility into revenue growth positively, the company's prospects are partially limited relative to HCIT peers given the company's target market in the large hospital system segment that is characterized by a fully penetrated client base, a rapidly consolidating set of potential customers, larger scale competitors, and entrenched EHR software providers that may seek to expand RCM offerings over time.

The company scores positively on profitability metrics with Fitch forecasting EBITDA margins of 41%-42% over the ratings horizon, which compares well to the 32% average and is near the top of the 13%-45% range for Fitch-rated HCIT peers. Fitch also expects consistent FCF margins in the mid-teens over the forecast horizon due to strong EBITDA margins, significant tax shields and declining capital intensity as the company completes certain growth investments in product and infrastructure. Fitch believes strong FCF will be sustainable due the low cyclicality of the business, a rapid cash conversion cycle and low capital intensity.

Despite these attractive characteristics, Fitch calculated pro forma leverage of 7.9x is materially higher than the 6.25x median for Technology issuers in the 'B' ratings category. Fitch expects a moderate decrease in leverage to 7.7x over the ratings horizon as private equity ownership and a constrained EBITDA growth profile likely limit further deleveraging. Fitch views leverage as the primary determinant of the 'B' rating. No country-ceiling, parent/subsidiary or operating environment aspects had an impact on the rating. Fitch applied its Hybrid criteria to the expected issuance of preferred equity as part of the transaction and determined that no equity credit should be assigned.

KEY RECOVERY RATING ASSUMPTIONS

--The recovery analysis assumes that nThrive TSH would be reorganized as a going-concern in bankruptcy rather than liquidated.

--We have assumed a 10% administrative claim.

Going-Concern (GC) Approach

--The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which we base the enterprise valuation $(EV)$. Fitch contemplates a scenario in which elevated competition from larger RCM providers results in increased client churn and decreased revenue growth, as well as increased sales and R&D expenses to address the challenges. As a result, Fitch expects that nThrive TSG would likely be reorganized with a similar product strategy and higher than planned levels of operating expenses as the company reinvests to ensure customer retention and defend against competition.

--Under this scenario, Fitch believes EBITDA margins would decline such that the resulting going-concern EBITDA is approximately 15% below September 2020 LTM EBITDA.

--An EV multiple of 7x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors:

Comparable Reorganizations: In Fitch's 13th edition of its "Bankruptcy Enterprise Values and Creditor Recoveries" case study, the agency notes seven past reorganizations in the technology sector, where the median recovery multiple was 4.9x. Of these companies, only two were in the software subsector: Allen Systems Group, Inc. and Aspect Software Parent, Inc., which received recovery multiples of 8.4x and 5.5x, respectively. Fitch believes the Allen Systems Group, Inc. reorganization is highly supportive of the 7.0x multiple assumed for Waystar given the mission critical nature of both companies' offerings.

M&A Precedent Transaction: A study of M&A in the healthcare IT industry from 2010 to 2017 that included an examination of 35 transactions involving RCM providers established a median EV/EBITDA transaction multiple of 15.5x. More recent comparable M&A such as the buyouts of athenahealth, Waystar and eSolutions continue to support similar transaction multiples.

Fitch evaluated a number of qualitative and quantitative factors that are likely to influence the GC valuation:

--1) Secular trends and regulatory environment are highly supportive as increased regulatory burdens, claims processing complexity and reimbursement pressures promote demand growth;

--2) Barriers to entry are high relative to software issuers as deep domain and regulatory expertise are required to develop solutions for automated claims processing;

--3) nThrive is a top five RCM software provider to large hospital systems but is still of significantly smaller scale than certain competitors such as Change Healthcare, Inc. and Experian Information Solutions, Inc.;

--4) Revenue and cash flow outlook is favorable as long-standing secular trends in health expenditures are supportive of revenue growth while strong profitability and low capital intensity promote FCF margins in the mid-teens;

--5) Revenue certainty is high as a result of the 92% recurring revenue profile;

--6) EBITDA margins are near the top of the 13%-45% range for Fitch-rated HCIT peers; and

--7) Operating leverage is durable given a highly variable cost structure typical of software developers. Fitch believes these factors reflect a particularly attractive business model that is likely to generate significant interest, resulting in a recovery multiple at the high-end of Fitch's range.

The recovery model implies a 'BB' and 'RR1' Recovery Rating for the company's first-lien senior secured facilities, reflecting Fitch's belief that lenders should expect to recover 91% or greater in a restructuring scenario.

HYBRIDS TREATMENT

As part of the financing package for Clearlake's buyout of nThrive TSG, the company expects to issue $150 million of preferred equity to an unaffiliated investor. The entity incurring the obligation has not been determined, but is expected to be outside the restricted group. The preliminary terms of the preferred equity include a provision that would trigger mandatory redemption in the event of an acceleration under the first or second lien credit facilities. Under Fitch's hybrid criteria, any cross-acceleration clause would result in no equity credit. Fitch has thus determined to treat the preferred equity as debt. Key Assumptions Fitch's Key Assumptions Within Our Rating Case for the Issuer

- Transaction: purchase of nThrive TSG by private equity sponsor Clearlake Capital Group completed for total consideration of $1.15 billion, funded under the currently contemplated financing terms including, the issuances of a $75 million first lien undrawn RCF, a $440 million first-lien term loan, a $160 million second-lien term loan, as well as $150 million of preferred equity the balance provided by an equity contribution from the sponsor;

- Revenue: growth of 4.9% in 2020, consistent with YTD results; growth of 5%-5.5 % per year thereafter, due to cross selling efforts, new logo growth and increasing medical procedure volumes, consistent with end-market forecasts;

- Margins: EBITDA margins of 41%-42% in 2020 - 2021 with margin expansion of 50bp per year thereafter due to scaling efficiencies and declines in G&A declines resulting from operating leverage associated with infrastructure requirements;

- Capex: capital intensity of 12% in fiscal 2020 due to product and infrastructure investments, gradually declining to 6.5%, consistent with HCIT peers; RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade:

- (Cash flow from operations - capex)/total debt with equity credit sustained above 6.5%;

- Reduction in debt leading to total debt with equity credit/operating EBITDA sustained below 5.5x;

- Revenue growth consistently in excess of Fitch's forecasts;

- Strengthened competitive positioning and increased scale.

Factors that could, individually or collectively, lead to negative rating action/downgrade:

- (Cash flow from operations - capex)/total debt with equity credit sustained below 5%;

- Total debt with equity credit/operating EBITDA sustained above 7.5x;

- Revenue declines resulting from market share losses or deterioration in competitive position. Best/Worst Case Rating Scenario International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit Liquidity and Debt Structure Adequate Liquidity: Fitch expects nThrive TSG to maintain sufficient liquidity following the transaction given moderate operating expense requirements that result in strong margins, a highly variable cost structure, a short cash conversion cycle due to monthly billing, and declining capital intensity. Pro forma for the transaction, liquidity is expected to be comprised of $5 million in cash and an undrawn $75 million revolving credit facility (RCF). Liquidity is further supported by Fitch's forecast for nearly $75 million in aggregate FCF over 2021-2022. Fitch forecasts steady growth in liquidity, approaching $145 million by 2022 due to accumulation of FCF and the expectation for the RCF to remain undrawn. Summary of Financial Adjustments Fitch made standard financial adjustments as described in the applicable ratings criteria. Date of Relevant Committee 05 January 2021 Sources of Information The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3' - ESG issues are credit neutral or have only minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity.

nThrive TSG has an ESG Relevance Score of '4' for Governance Structure due to its ownership by private equity sponsor Clearlake Capital, who is assumed to be heavily biased in favor of shareholder returns.

For more information on Fitch's ESG Relevance Scores, visit REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria.

MedAssets Software Intermediate Holdings, Inc.; Long Term Issuer Default Rating; New Rating; B; Rating Outlook Stable ----senior secured; Long Term Rating; New Rating; BB

Contacts: Primary Rating Analyst Chaim Kurland, Director +1 212 908 0281 Fitch Ratings, Inc. 33 Whitehall Street New York, NY 10004

Secondary Rating Analyst Alen Lin, Senior Director +1 312 368 5471

Committee Chairperson David Peterson, Senior Director +1 312 368 3177

Media Relations: Elizabeth Fogerty, New York, Tel: +1 212 908 0526, Email: elizabeth.fogerty@thefitchgroup.com

Additional information is available on Applicable Model Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s). Corporate Monitoring & Forecasting Model (COMFORT Model), v7.9.0 (1 ())

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