S&P rates Thryv, loan B

S&P said it assigned B ratings to Thryv Holdings Inc. and its planned $700 million term loan. The loan’s recovery rating is 3.

“Our issuer credit rating on Thryv reflects its participation in the print and internet-based directory services business (which is experiencing annual secular declines of about 20%), the small scale and low profitability of its software as a service (SaaS) business, its high degree of competition from internet-based services, and its industry's limited barriers to entry,” S&P said in a press release.

However, the agency said Thryv’s record of cutting costs and maintaining EBITDA margins of about 30% in its marketing services business, as well as its healthy cash flow generation, which should allow it to use its excess cash flow to pay down debt and maintain leverage in the 2x-3x range over the coming years.

The company will use the proceeds to refinance its term loan due 2023 in full, repay a portion outstanding under its asset-based loan revolver and fund Sensis' acquisition for about $200 million.

The outlook is stable.

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