S&P ups Macom Technology

S&P said it raised its ratings on Macom Technology Solutions Holdings Inc. to B+ from B and its senior secured notes to BB from BB-. The recovery rating on the notes is 1.

“Macom's strong performance and EBITDA margin improvement are leading to faster than expected deleveraging in fiscal 2021. The upgrade follows Macom's EBITDA margin improvement to above 30% in the 12 months ended July 2, 2021. Successful cost control such as facility consolidation and manufacturing efficiencies has supported this, allowing for significant operating leverage gains from the company's strong revenue growth in fiscal 2021,” the agency said in a press release.

S&P said it forecasts Macom’s EBITDA margins to continue steadily improving to the low- to mid-30% area and leverage falling below 3.5x in fiscal 2021 and nearing 3x in fiscal 2022.

The outlook is stable.

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