Moody's eyes Columbus McKinnon for trim

Moody's Investors Service said it placed Columbus McKinnon Corp.'s Ba3 corporate family rating, Ba3-PD probability of default rating and Ba2 senior secured bank debt ratings on review for downgrade. There is no change to the company's SGL-1 speculative grade liquidity rating.

“The review for downgrade is prompted by the company's announcement that it will acquire Dorner Manufacturing, a precision conveyor systems provider, for approximately $485 million. Columbus McKinnon management expects the acquisition to be largely debt-financed,” Moody’s said in a press release.

The agency noted the company plans to sell $150 million in equity to repay debt after the transaction.

“The acquisition will enhance the company's scale and diversify its end-markets while contributing favorably to the company's profit margins. At the same time, Moody's anticipates that the transaction will increase Columbus McKinnon's financial leverage while the company is in the midst of focusing on margin and earnings improvement stemming from coronavirus-driven demand headwinds,” the agency said.

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