Announcement: Filtration Group’s pending acquisition of a filter firm is credit score adverse; rankings unaffected together with the B3 Sr Secured and B3 CFR
World Credit score Analysis – 11 Dec 2020
New York, December 11, 2020 — Moody’s Buyers Service (Moody’s) stated that Filtration Group Company’s (Filtration Group) plan to buy a number one filtration firm with incremental debt is credit score adverse. Filtration Group’s rankings, together with the B3 senior secured and Company Household Ranking, and the secure outlook, are unaffected right now. The acquisition is predicted to shut throughout the subsequent thirty days, topic to regulatory approvals.
Funding for the acquisition will embody a E175 million add-on to the first-lien time period mortgage (roughly $1.95 billion excellent). The added debt will push professional forma debt-to-EBITDA (after Moody’s commonplace changes) to close 7x. Although Filtration Group’s deleveraging historical past is skewed extra to earnings development than to debt reimbursement, Moody’s expects the ratio to fall steadily to beneath 6x by year-end 2021 by each debt reimbursement and earnings development.
Notably, this largely debt-funded acquisition intently follows a $400 million debt-funded shareholder dividend in October 2020. With this acquisition funding, whole debt will improve roughly 40% over simply three months. Accordingly, Filtration Group’s monetary flexibility on the score stage is sharply lowered, with restricted capability for equally structured transactions over the near-to-intermediate time period.
Positively, the acquisition expands Filtration Group’s presence and brings capabilities that it will possibly leverage with its legacy enterprise. The acquisition must be margin accretive within the close to time period after modest integration prices.
Filtration Group Company is a designer and producer of fluid and air filtration merchandise to clients in medical & bioscience, indoor air high quality, CO2 emission discount, meals & beverage and quite a lot of different finish markets. Revenues for the newest twelve months ended September 30, 2020 had been almost $1.5 billion.
This publication doesn’t announce a credit standing motion. For any credit score rankings referenced on this publication, please see the rankings tab on the issuer/entity web page on www.moodys.com for probably the most up to date credit standing motion data and score historical past.
Eric Greaser Vice President - Senior Analyst Company Finance Group Moody's Buyers Service, Inc. 250 Greenwich Road New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Consumer Service: 1 212 553 1653 Robert Jankowitz MD - Company Finance Company Finance Group JOURNALISTS: 1 212 553 0376 Consumer Service: 1 212 553 1653 Releasing Workplace: Moody's Buyers Service, Inc. 250 Greenwich Road New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Consumer Service: 1 212 553 1653
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