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S&P puts Kratos on watch
Standard & Poor's said that it placed Kratos Defense & Security Solutions Inc.'s B+ corporate credit rating on CreditWatch with negative implications.
On Feb. 7, Kratos announced it agreed to acquire Herley Industries Inc. for $270 million plus fees and expenses, S&P said.
Kratos plans to finance the transaction with the proceeds from a recent stock offering, an add-on to the existing 10% secured notes due 2017 and cash on hand at Herley, the agency said.
The acquisition will improve Kratos' program and product diversity, as well as complementing some of the platforms it currently supports, the agency said.
The debt-to-EBITDA pro forma ratio for the Herley acquisition is around 5 times.
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