S&P rates Magenta Buyer B

S&P said it assigned Magenta Buyer LLC a B issuer rating. The agency also gave B issue-level and 3 recovery ratings to its proposed first-lien credit facility, and a CCC+ issue-level and 6 recovery ratings to the second-lien term loan.

Symphony Technology Group said it agreed to acquire McAfee Corp.'s enterprise security business in an all-cash carve-out transaction for about $4 billion. The rated entity will be Magenta Buyer LLC.

“We expect McAfee Enterprise's revenues to be flat--as such, improvement of its credit metrics and margin profile will be entirely driven by successful cost reduction initiatives. We expect the company to execute most of its synergy plan within two quarters of deal close and expect profitability to improve starting in 2022. We expect EBITDA margins to improve to about 30%, entirely driven by cost management,” S&P said in a press release.

The outlook is negative. Magenta Buyer’s negative e outlook reflects its high starting leverage, estimated to be around 10x at the deal’s close, falling to about 7x over the next 12-18 months, S&P said.

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