Moody’s rates Alorica loans B1

Moody’s Investors Service said it assigned a first-time corporate family rating of B1 and B1-PD probability of default rating to Alorica, Inc.

The agency also said it assigned B1 ratings to the company’s senior secured first-lien revolver, term loan A and term loan B.

The outlook is stable.

Alorica has entered into a definitive agreement to acquire Expert Global Solutions, Inc., which is expected to close in the third quarter of 2016.

The combined entity will create the third largest U.S.-based business-process outsourcing firm, Moody’s said.

The proceeds from a $445 million term loan A, new $450 million term loan B and cash from the balance sheet will be used to refinance all of Expert Global’s existing debt, pay off about $29 million of Alorica’s revolver, provide equity distributions to Alorica’s and Expert Global’s management and owners and pay transaction costs, the agency said.

At closing, Alorica’s shareholders will own about 63% of the pro forma equity and One Equity Partners and their affiliate shareholders will own the remaining 37%, Moody’s explained.

Alorica is positioned in the B1 corporate family rating category given the integration risk associated with combining two large entities, each with over a billion dollars in revenues, the agency said.

This on the heels of another large acquisition Alorica recently closed in March 2015 when it acquired West AS, doubling Alorica’s revenues to about $1.2 billion, Moody’s said.

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