S&P rates Synaptics, notes BB-

S&P said it assigned BB- ratings to Synaptics Inc. and its planned $400 million of senior unsecured notes with a 4 recovery rating.

“Our BB- rating reflects Synaptics' high customer concentration, relatively modest scale, and acquisitive growth strategy focused on repositioning the business toward the less volatile and more fragmented IoT market segment. It also reflects Synaptics' higher profitability, healthy free cash flow generation, and releveraging potential to fund acquisitions,” the agency said in a press release.

Proceeds will be used to repay the $100 million of borrowings under its revolving credit facility and for general corporate purposes, which may include prefunding the repayment of a portion of its convertible senior notes.

The outlook is stable, reflecting the view the company will resume growing its revenue and improving its profitability in fiscal 2022, S&P said.

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