S&P upgrades AMCO

Standard & Poor’s said it raised the long-term corporate credit rating on Amdipharm Mercury Debtco Ltd. (AMCO) to B+ from B.

The agency also said it raised to B+ from B the issue ratings on AMCO’s senior secured bank facilities, including the proposed increase of £114.7 million. S&P said it affirmed the recovery rating at 3.

The outlook is stable.

The upgrades reflect a view that AMCO’s revenues and EBITDA have reached levels that enable the company to absorb larger acquisitions while maintaining credit metrics viewed as commensurate with a higher rating, S&P said.

The agency also said it forecast the company’s debt-to-EBITDA ratio of about 5x on average over the next three years.

Since 2012 when AMCO was acquired by private equity group Cinven, it has been able to increase its EBITDA via strong organic growth and acquisitions that have enabled fast de-leveraging, S&P said.

In 2015, the company undertook several acquisitions that broaden its drug portfolio and reduced its reliance on the United Kingdom as its main market, the agency said.

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