S&P revises Valeo to negative

S&P revised its outlook on Platform Bidco Ltd., Valeo Foods Group’s parent entity to negative, based on deleveraging headwinds.

The Ireland-based food manufacturer’s B- rating and the same B- rating on its senior secured first-lien term loan B due in September 2028 were affirmed.

The negative outlook is primarily due to operational issues in the company’s U.K. snacking division.

The agency now estimates that the company’s adjusted gross debt to EBITDA will be well above 10x with negative free operating cash flow for the year.

Due to passing on significant price increases and lower raw materials prices, S&P expects profitability will rebound in the next 12 months and projected adjusted debt to EBITDA will decline to around 10x and there will be positive free operating cash flow by the end of fiscal 2024.

However, the company’s rating will be lowered if the company can not clearly deleverage below 10x adjusted debt to EBITDA in the next 12 months.

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