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S&P places Simply Good Foods on watch
S&P said it put Simply Good Foods Co. on CreditWatch with negative implications ahead of a debt-funded acquisition.
Simply Good Foods plans to buy Quest Nutrition for $1 billion.
“We estimate pro-forma leverage at close will rise to 7x, well above our current 5x downgrade trigger, assuming $775 million of the purchase price is funded with debt and no synergies are factored in,” said S&P in a news release.
The company, however, sees synergies of $20 million over three years, and the agency said it will review that before ending the CreditWatch.
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