Fitch reviews Hubbell

Fitch Ratings said it placed Hubbell Inc.'s long-term and short-term issuer default ratings of A and F1 on rating watch negative.

The actions follow the company's announcement that it entered into an agreement to acquire Aclara Technologies LLC from an affiliate of Sun Capital Partners for approximately $1.1 billion.

The actions affect $1.1 billion of debt outstanding as of Sept. 30.

Fitch said it expects to downgrade Hubbell's long-term and short-term ratings by one notch at or around the time the Aclara transaction closes, which is expected to occur in the first quarter.

“This reflects an expected increase in financial leverage offset in part by the strategic benefits from the acquisition. There is the potential for additional downside to the rating longer-term should the pace of deleveraging be slower than expected due to additional acquisitions or slower growth in the company's end markets,” the agency explained in a news release.

“In addition, Fitch will monitor the integration of Aclara, which is larger than the company's typical acquisition, and the degree to which the company can achieve revenue synergies from the acquisition.”

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