Moody's affirms Mauser

Moody's Investors Service said it confirmed the B2 corporate family rating and Caa1 senior notes rating of Mauser Beteiligungs GmbH following the company's successful acquisition of the assets of Russell-Stanley Holdings Inc.

The outlook is stable.

Mauser's €81 million asset acquisition of Russell-Stanley was financed via an increase in senior bank debt of €92 million and an additional €20 million equity injection by One Equity Partners - the private equity arm of J.P. Morgan Chase & Co., which pro forma will hold 90% of Mauser, with the remaining 10% being held by management. The excess €31 million in raised funds is to be applied toward new investments, one-off integration costs, fees and expenses as well as the repurchase of warrants.

Moody's said the company's ratings reflect following credit challenges: the size of the acquisition presents a significant challenge in terms of integration risk and the successful realization of cost synergies and consequent margin improvements, adjusted total debt/EBITDAR is 5.43x, working capital is under pressure and free cash flow is constrained by the pressure on working capital, high capital expenditure levels as well as debt amortization and servicing costs.

The ratings also reflect the following credit strengths: the acquisition will position Mauser as the number two global provider of industrial packaging, Mauser enjoys a strong reputation for producing well-developed and established proprietary industrial packaging technologies and products and the company's management team is experienced and focused, the agency said.

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