S&P gives Barracuda loans B, CCC+

S&P said it gave B issue and 2 (70%) recovery ratings to Barracuda Parent LLC’s planned $1.115 billion first-lien term loan due 2029 and it prospective $150 million revolver due 2027. The agency rated its planned $455 million second-lien loan due 2030 CCC+ with a 5 recovery rating (10%).

KKR plans to use the loans and new equity to buy Barracuda Networks Inc. from Thoma Bravo LP. The revolver is expected to be undrawn at close.

The agency also affirmed Barracuda Networks’ B- issuer rating. “Strong recent growth will enable Barracuda to service a considerably higher funded debt balance. This transaction will increase Barracuda's funded debt balance about $300 million to approximately $1.6 billion and raise annual interest expense to about $100 million. Although this a much higher financial burden, the company has performed well over the past two years amid a generally favorable environment for IT security vendors and its EBITDA has grown considerably over the past 24 months,” S&P said in a press release.

The outlook remains stable.

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