S&P turns Carestream view to stable

S&P said it revised Carestream Dental Parent Ltd.’s outlook to stable from negative and affirmed the B ratings on the company and its first-lien debt.

“We expect CSD will maintain its improved operating performance for the rest of 2021. We believe the company, which maintains solid market positions in imaging equipment and software for dental business, will continue to benefit from the ongoing recovery in dental visit volumes worldwide as the effects of the pandemic subside,” the agency said in a press release.

S&P noted CSD’s first quarter delivered a robust recovery in its sales, including an increase in its equipment and dental practice management software segments compared to first-quarter 2020 and first-quarter 2019 (pre-pandemic).

“We forecast CSD's EBITDA and FOCF generation will exceed pre-pandemic levels, supporting the potential for gradual leverage reduction to below 5x in 2022. However, given the company's private equity ownership, we expect CSD to prioritize shareholder returns over permanent debt reduction. Hence, we believe the long term leverage will remain over 5x,” the agency said.

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