Moody’s: Zekelman add-on is credit neutral

Moody's Investors Service said Zekelman Industries, Inc.'s proposed $100 million term loan add-on to its existing $821 million term loan is credit neutral.

The proceeds will be used to complete the acquisitions of a tubular products competitor and Western Tube & Conduit.

Moody’s said it views the additional debt raise as credit neutral since the acquisition multiple of the combined companies is expected to be moderately below Zekelman's current leverage ratio and the acquisitions will enhance the company's scale and market position.

The company has leading market positions in key product areas, including hollow structural steel, standard pipe, electrical conduit, galvanized mechanical tube and fittings, the agency said.

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