S&P rates CentroMotion B

S&P said it assigned B ratings to BRWS Parent LLC (CentroMotion) and its first-lien debt.

The company plans to acquire Carlisle Brake & Friction from Carlisle Cos. Inc. for $250 million, plus up to an added $125 million earn-out based on the company achieving certain performance targets in fiscal 2021. CentroMotion will use term loan proceeds for the acquisition and to refinance its capital structure.

CentroMotion plans to issue a $100 million asset-based loan revolver due 2026, undrawn at close, a $420 million term loan B due 2028 and a $125 million delayed-draw term loan B due 2028, also undrawn at close and will be used to finance potential earn out.

“We expect the company's sales to grow about 20% in 2021 as a result of a strong outlook for CentroMotion's customers given the robust economic and end market recovery. We forecast incremental margins in the 30% range, resulting in EBITDA margins in the low-double-digit-percentage range. We believe these factors will allow the company to reduce leverage to the mid- to high-6x area in 2021 before further deleveraging in 2022,” S&P said in a press release.

The outlook is stable.

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