Moody’s rates Cole-Parmer facilities B2, Caa2

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to the new holding parent of Cole-Parmer Instrument Co., LLC, Churchill Merger Sub, LLC.

Concurrently, the agency assigned a B2 rating to the company's proposed $40 million first-lien senior secured revolver and $410 million first-lien senior secured term loan, as well as a Caa2 rating to the proposed $180 million second-lien senior secured term loan.

The outlook is stable.

Proceeds from the first- and the second-lien term loans plus $410 million of equity and cash will be used to finance the leveraged buyout (LBO) of Cole-Parmer by certain funds managed and controlled by Golden Gate Capital for a total purchase price of about $955 million (excluding transaction fees and expenses, collectively estimated to be about $45 million). The new $40 million revolver is expected to be undrawn at closing.

"Cole-Parmer's B3 corporate family rating incorporates the sizable increase in debt balances and moderate deterioration of credit metrics due to the leveraged buyout of the company," Moody's analyst Prateek Reddy said in a news release.

"Cole-Parmer's good free cash flow generating ability and the likely continuation of aggressive financial policies, including a penchant for growth through acquisitions, have also been incorporated into the ratings."

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