Moody's eyes Owens & Minor for trim

Moody's Investors Service said it placed Owens & Minor, Inc.’s ratings on review for downgrade following the proposed acquisition of Apria, Inc. Owens & Minor see closing the deal in the first half of 2022.

The ratings placed under review for downgrade include the Ba3 corporate family rating, the Ba3-PD probability of default rating, the Ba2 senior secured rating and the B1 senior unsecured rating. The outlook is revised to under review from stable. There is no change to the speculative grade liquidity rating , at SGL-1.

“The review for downgrade reflects higher financial leverage resulting from the acquisition. debt/EBITDA for the LTM period ended Sept. 30, 2021, was 2x and the company has stated that leverage may peak around four times (by its calculations) pro forma for the transaction,” Moody’s said in a press release.

The agency said the review will consider the company’s deleveraging strategy, the benefits, possible changes to its capital structure among other concerns.

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