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Moody's changes Wesco view to developing
Moody's Investors Service said it changed the outlook of Wesco Distribution Inc. to developing from stable.
The change in rating outlook is prompted by the recent announcement that Wesco has entered into an all-cash definitive purchase agreement to acquire The Carlton-Bates Co. subject to various approvals.
Wesco's Ba3 corporate family rating reflects the company's improved credit statistics as a result of lower debt levels and improved operating performance, the agency said. The ratings also reflect the company's geographic reach, product breadth, minimal capital requirements and relatively extensive base of both customers and suppliers.
However, Moody's said the ratings also reflect a relatively high level of supplier concentration, significant amount of intangibles and relatively high adjusted debt levels. The ratings also incorporate the potential for acquisitions given the fragmented nature of the industry in which Wesco operates, although Moody's expects that if acquisitions do occur they will be smaller tuck-ins and accretive to earnings.
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