Moody's affirms SFBC

Moody's Investors Service said it affirmed its B2 rating for SFBC International's revised $160 million senior secured credit facility. Moody's also affirmed its senior implied rating of B2.

The outlook is stable.

Moody's said the ratings reflect the challenges of managing a business that has grown rapidly through acquisitions over the past few years, the integration risk associated with the recent PharmaNet transaction, the decentralization of the company's operations and systems, its smaller size relative to larger competitors, and high geographic concentration of business in the United States and Canada.

SFBC also faces industry risks such as the short duration and lack of visibility on future business, potential cancellation of existing contracts, and strong customer buying power.

Factors mitigating these concerns, Moody's said, include an attractive and diversified customer base, high level of repeat business from existing pharmaceutical customers, strong underlying growth in research and development spending by the pharmaceutical industry, and solid growth prospects from generic manufacturers. Additional factors supporting the rating include the minimal amount of capital expenditure requirements to support future growth, and the strategic fit and synergistic potential of the PharmaNet acquisition.

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