Moody's assigns B3 to Balrog

Moody's Investors Service said it assigned a first-time B3 corporate family rating to Balrog Acquisition, Inc., (BakeMark), a B3-PD probability of default rating, a B3 to its expected first-lien term loan and a Caa2 to the planned second-lien term loan.

“BakeMark's B3 CFR and stable outlook reflect a relatively aggressive financial policy as evidenced by high starting debt to EBITDA leverage (including Moody's adjustments) in the 7x to 8x range and modest EBITDA margins, though healthy relative to those typical of a distribution business. At the same time, it reflects Bakemark's position as a leading distributor and manufacturer of bakery ingredients across North America and in some added markets, with a diverse customer base, longstanding relationships, limited exposure to commodity inflation due to cost pass through arrangements and a captive truck fleet, the agency said in a press release.

The debt issuance is in connection with the acquisition of BakeMark by private equity firm Clearlake for an undisclosed purchase price to be funded about half with equity and half with debt.

The outlook is stable, reflecting a forecast for strong growth rates and positive free cash flow that will help lower leverage, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.