Moody's affirms KeHE on acquisition

Moody's Investors Service said it affirmed KeHE Distributors, LLC’s B2 corporate family rating and B2-PD probability of default rating and the B3 (LGD5) rating assigned to its $200 million second-lien notes due 2021. The outlook remains stable.

"Although the debt-funded acquisition of Nature's Best will increase KeHE's leverage, its credit metrics will remain within the established thresholds for the company's B2 rating," Mickey Chadha, senior analyst at Moody's, said in an agency news release.

"The acquisition will further strengthen KeHE's good market position in a growing and attractive market niche for specialty, organic and natural foods.

“However, it is a relatively small player in the overall food distribution business segment and could be vulnerable if larger broadline food distributors enter its niche market."

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