Moody's rates Platform Specialty notes B2

Moody's Investors Service said it assigned a B2 (LGD5) rating to Platform Specialty Products Corp.'s new $920 million senior notes due 2022 to be issued in dollar and euro tranches and affirmed the company’s corporate family rating at B1, probability of default rating at B1-PD and speculative grade liquidity rating at SGL-3, MacDermid Inc.’s senior secured term loans at B1 (LGD3) and MacDermid Agricultural Solutions Holdings BV’s term loan at B1 (LGD3). The outlook is negative.

The issuance completes the funding for the $3.51 billion acquisition of Arysta LifeScience Ltd., parent of Arysta LifeScience SPC, LLC (B2/stable), whose ratings will be withdrawn upon completion of the transaction.

"The notes issuance completes the capital structure for Platform's recent acquisitions of Arysta, Agriphar and CAS, resulting in elevated leverage but increasing the scale and diversity, nearly quadrupling the size of the company," Moody's analyst Lori Harris said in an agency news release. "The weakened credit metrics and integration risk constrains the rating until the company demonstrates cash generation, growth and reduced leverage from the combined entity."

The agency said Platform's B1 corporate family rating is constrained by the company's elevated pro forma leverage (5.5 times as of Sept. 30 and 5.0 times including synergies), the significant integration risks associated with the three recent acquisitions and expectations of continued acquisition-driven growth.

The rating is supported by the improved size, increasingly diverse revenue stream and strong margins and cash flow generating capabilities of the combined businesses, which benefit from geographic, operational and product diversity through its global footprint, Moody’s said.

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