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Moody's rates Element Materials loans B1
Moody's Investors Service said it affirmed Element Materials Technology Ltd.'s B2 corporate family rating and B2-PD probability of default rating.
The agency also said it assigned a B1 instrument rating to the new $720 million first-lien term loan B facility due 2024 issued by Greenrock Finance, Inc. and Element Materials Technology Group U.S. Holdings Inc.
Moody's also assigned a B1 instrument rating to the new $100 million revolving credit facility due 2023 and $50 million capex/acquisition facility due 2024 issued by Greenrock Finance, Greenrock Midco Ltd. and Element Materials Technology Group U.S. Holdings.
The agency also assigned a B1 instrument rating to the new £160 million first-lien term loan B due 2024 and €204.2 million first-lien term loan B due 2024 issued by Greenrock Midco.
The outlook is stable.
Element will use the proceeds from the issuance of the first-lien loan and a new $230 million second-lien facility due 2025 that is not rated, along with $20 million of cash on balance and $250 million of equity contribution from the shareholders and management to fund the acquisition of Exova Group plc for £620.3 million, Moody's said.
The agency also said it will refinance Element's current debt, provide $40 million of cash overfund and pay transaction fees, the agency said.
The offer still needs approval from the Exova shareholders and regulators, Moody's said.
Exova's board and largest shareholder have OK'ed the deal, the agency explained.
The transaction is expected to close at the end of June, Moody's added.
The ratings reflect the positive contribution from Exova to Element's business profile, improving the company's segmental and geographical diversification while enhancing its scale in existing sectors, good track record of the company in integrating bolt-on acquisitions and good pro forma liquidity position, the agency said.
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