S&P puts Accellent on positive watch

Standard & Poor's said it placed the ratings on Accellent Inc., including its B corporate credit rating, on CreditWatch with positive implications.

The CreditWatch placement follows a signed agreement for Greatbatch to acquire Accellent for $1.73 billion in cash, stock and the assumption of debt, S&P said.

Greatbatch's planned acquisition of Accellent is materially positive for Accellent lenders given that Greatbatch has significantly lower debt leverage of about 1.5x, the agency said.

Pro forma for the transaction, Greatbatch is expected to have about $1.2 billion of debt and about $240 million to $250 million of EBITDA, S&P said.

This translates to adjusted debt leverage of about 5x, a significant improvement from 2014 debt leverage at Accellent of 8.7x, the agency said.

The businesses are broadly complementary in their offering of contract manufacturing services and that the combination increases scale and diversification and offers customers a broader portfolio of capabilities, S&P said.

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