S&P rates Eclipse Midco facility B-, notes CCC

S&P said it assigned Eclipse Midco Inc.’s (ECi Software Solutions) $780 million first-lien facility a B- rating with 3 recovery rating and its $280 million of second-lien notes due 2028 a CCC rating with a 6 recovery rating.

ECi will use the proceeds primarily to refinance debt, fund the acquisition of Shockwave for $205 million, and for a $118 million dividend payment to the sponsor, Apax. As a result, S&P said it forecasts pro forma adjusted debt to EBITDA to reach the high-9x area at transaction close, then decline to the low-8x area by 2021.

Concurrently, S&P affirmed ECi’s B- rating and changed the outlook to stable from negative. “The stable outlook is founded on our expectation that near-term margin expansion at Shockwave and modest organic revenue growth will enable ECi to generate sufficient cash to service its capital structure,” the agency said in a press release.

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