S&P puts Kaman on negative watch

S&P said it placed the BB+ issuer credit rating on Kaman Corp. on CreditWatch with negative implications.

Kaman recently announced that it will sell its distribution business for about $700 million.

The agency said it plans to resolve the CreditWatch placement once the transaction closes.

S&P said it could lower the long-term issuer credit rating on Kaman by one notch at that time.

The agency will assess the likely increase in the volatility of Kaman's margins after it divests its distribution business, which accounted for about 61% of its revenue and 35% of its operating profit in 2018.

It also reflects the company's smaller size and operational scope, less diverse customer base and an expectation that it will be more aggressive in pursuing acquisitions following the divestiture, S&P said.

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