Moody's rates Valeo Foods B3, loans B2

Moody's Investors Service said it assigned a first-time B3 corporate family rating and B3-PD probability of default rating to Platform Bidco Ltd., a new entity created for the acquisition of Valeo Foods Group Ltd. Concurrently, Moody's gave B2 ratings to the €1.01 billion senior secured first-lien term loan B and to the €180 million senior secured revolver.

"The B3 rating is supported by Valeo's leading position in selected food categories, its pan-European presence, its portfolio of well-recognized brands and its track record of positive free cash flow generation and success at integrating acquisitions. These strengths are offset by the company's high financial leverage and our expectation that ongoing acquisitions might delay any sustainable improvement in credit metrics," said Paolo Leschiutta, a Moody's senior vice president and lead analyst for Platform Bidco, in a press release.

"However, the rating assumes that the company's Moody's adjusted leverage will reduce below 8x over the next 12 to 18 months on the back of cost savings and that any debt-funded acquisition activity will not result in a prolonged deterioration in financial leverage," Leschiutta added.

Proceeds from the term loan together with equity contribution will be used to finance Bain Capital’s acquisition of Valeo, to repay the company's debt and to pay transaction fees and expenses.

The outlook is stable.

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