Moody's assigns Mitratech B3

Moody's Investors Service said it assigned first-time ratings to Maverick Bidco, Inc. (Mitratech), including a B3 corporate family rating, B3-PD probability of default rating and B2 debt instrument ratings on the company's proposed first-lien credit facility consisting of a $40 million revolver due 2026 (undrawn at close), $445 million term loan due 2028, and $75 million delayed drawn term loan (undrawn at close).

Moody's also assigned a Caa2 debt instrument rating on the proposed $185 million second-lien term loan due 2029. The outlook is stable.

The B3 CFR reflects Mitratech's 9.7x debt/EBITDA, pro forma for the proposed capital structure and two acquisitions under letters of intent and excluding actioned but unrealized synergies, or 9x when viewed on a cash EBITDA basis by adding back the change in deferred revenue to EBITDA. The rating also considers the company's small scale with pro forma revenue of about $160 million and a relatively narrow product focus within legal and compliance services and solutions, Moody’s explained.

Proceeds from the two term loans will be used with new cash equity and rollover of equity to support Ontario Teachers' Pension Plan Board's acquisition of Mitratech, fund the acquisition of two entities currently under letters of intent, expected to close simultaneously with OTPP's acquisition of Mitratech, and add $20 million of cash on the balance sheet. Owner Hg Capital and management will retain a minority ownership position in the new company.

The outlook is stable. The outlook reflects an expectation for low single-digit revenue growth and modest deleveraging as EBITDA growth is achieved by realizing synergies and organic performance, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.