S&P puts Accellent on watch

Standard & Poor's said it placed its B corporate credit rating on Accellent on CreditWatch with negative implications following Accellent's announcement that it plans to acquire Lake Region Medical.

S&P's issue-level ratings on Accellent's existing debt are unchanged. S&P expects this debt to be redeemed in connection with the acquisition, at which time S&P said it will withdraw these ratings.

"The CreditWatch listing reflects Accellent's potentially heightened financial risk resulting from its largely debt-financed acquisition of Lake Region Medical," said S&P credit analyst Gail Hessol in a news release.

"We believe Accellent's pro forma adjusted leverage could approach 8x and the acquisition could impair Accellent's ability to continue generating free operating cash flow, which has been a key support for its ratings. We also see risks in integrating a large acquisition."

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