S&P rates S4 Capital, loans BB-

S&P said it assigned preliminary BB- ratings to S4 Capital plc and its planned €375 million term loan B and planned £100 million revolving credit facility. The loans’ recovery rating is 3 recovery rating (rounded recovery estimate of 65%).

“Our preliminary rating considers S4 Capital's limited scale and track record in a fragmented and competitive market. S4 Capital plc is a U.K.-based digital advertising and marketing company that operates in the highly fragmented and competitive advertising market. It competes with traditional advertising holding companies (WPP, IPG, Publicis and Omnicom) and larger integrated consulting and technology companies such as Accenture, Capgemini and smaller players in the creative and tech space,” the agency said in a press release.

S4 Capital will use the loan proceeds to finance acquisitions and refinance debt.

The agency assigned a stable outlook, indicating it projects S4 Capital will continue to grow organically and through acquisitions while maintaining S&P Global Ratings-adjusted debt to EBITDA at 3x-4x.

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