S&P pulls MKS from watch

S&P said it removed MKS Instruments Inc.’s ratings from CreditWatch with negative implications and assigned a stable outlook. The agency placed the ratings on CreditWatch on Feb. 10 after it offered to acquire Coherent Inc. in a cash and stock deal.

“Coherent has entered into a merger agreement with II-VI Inc. As a result, we expect the MKSI's operations and financial performance to remain as previously expected for the rating, noting that we do not anticipate any significant mergers or acquisitions involving the company at this time. Leverage as of the end of 2020 was 0.4x, and we expect it to decrease over the coming year,” the agency said in a press release.

The outlook reflects the view MKS will deliver operating performance consistent with the semiconductor equipment manufacturing industry, keep EBITDA margins in the mid-20% area and continue generating discretionary cash flow greater than $300 million annually, S&P said.

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