S&P rates Synnex BBB-

S&P said it assigned a BBB- issuer rating to Synnex Corp., which recently obtained shareholder approvals for its merger with Tech Data Corp.

“We expect the company to raise about $4 billion to fund the combination, which under this structure we estimate would equate on a pro forma basis to S&P Global Ratings-adjusted leverage in the 2.5x area at the close of the transaction. We also envision that future financial policies will support this level of leverage or lower,” S&P said in a press release.

The agency said it assigned a stable outlook, which assumes Synnex delivers positive free operating cash flow (FOCF) of at least $600 million and that leverage will remain under 3x, even when accounting for shareholder returns and strategic acquisitions.

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