Moody’s could lower Cintas

Moody's Investors Service said it placed Cintas Corp. No. 2's A2 long term senior unsecured rating and Prime-1 short term commercial paper rating under review for downgrade following Cintas' announcement that it would acquire G&K Services, Inc. for about $2.2 billion.

Cintas plans to finance the transaction with new and assumed debt. Both boards have approved the transaction and, pending G&K shareholder and regulatory approvals, the transaction is expected to close in late 2016 or early 2017.

"Given the all-debt financed acquisition of G&K will result in Cintas maintaining debt to EBITDA of well above 2 times for the next few years, Moody's will likely downgrade Cintas' short term rating to Prime-2 and its long term rating to A3 or Baa1 upon completion of the rating review," Moody's vice president and senior credit officer Edmond DeForest said in a news release.

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