Moody’s puts Atkins on review

Moody's Investors Service said it put ratings for Atkins Nutritionals Holdings Inc. on review for downgrade, citing the company’s plan to acquire Quest Nutrition LLC for $1 billion cash.

“Atkins will take on a significant amount of debt with this transaction, and there are unique risks in managing two established brands with different niches in the nutritional snacking product segment,” said Vladimir Ronin, lead analyst for the company, in a news release.

“That said, Moody's believes that management's anticipation of deleveraging, including potential use of equity financing, the combined company's larger presence in the fast-growing nutritional snacking category, as well as potential synergies are mitigants that could help support the company's credit profile,” said Ronin.

The ratings on review are corporate family at B1, probability of default at B1-PD, senior secured first-lien revolving credit facility and senior secured first-lien term loan both at B1.

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