S&P places Synlab on watch

S&P said it placed its BB- ratings for Synlab AG and its senior secured term loans on CreditWatch with negative implications.

On Sept. 29 , Cinven, Synlab's major stakeholder, announced a public acquisition offer to all other shareholders at a price of €10 per share. The agency said it expects Cinven to raise added debt at Synlab to fund the deal.

“The negative CreditWatch placement reflects our view that Synlab will likely have a less favorable credit profile after Cinven successfully completes the acquisition. The potential new debt to finance the transaction, implying an increase in the total debt and weaker leverage metrics, is reminiscent of the approach Cinven applied when it was the sponsor owner of the company before the IPO in April 2021,” S&P said in a press release.

The agency said it aims to resolve the negative watch once it is confident the deal will close. “At this stage, we think that we could downgrade Synlab by up to two notches once the transaction is finalized. We will also assess the rating impact on Synlab's debt.”

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