S&P puts Griffon on positive watch

S&P said it placed all its Griffon Corp. ratings, including the B+ senior unsecured rating, on CreditWatch with positive implications.

The placement follows Griffon reporting it agreed to acquire MidOcean Hunter Holdings Inc. (Hunter Fan) for $845 million net of cash and outstanding debt, the agency said.

S&P said it anticipates Griffon will use a mix of cash and debt to finance the deal. At Sept. 30, the company had $250 million of balance sheet cash.

“Griffon exited 2021 (September year-end) with S&P Global Ratings-adjusted debt to EBITDA of 3.5x and EBITDA margins of 12.7%. These levels indicate an improvement in credit quality. However, at this point, we do not have details about the financing of the proposed acquisition and/or the timeline for the strategic review of alternatives for its defense electronics business, which, if sold, could provide proceeds toward debt reduction,” the agency said in a press release.

S&P said aims to resolve the CreditWatch following a review of Griffon's post-merger capital structure.

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