Moody's affirms Consilio

Moody's said it affirmed GI Revelation Acquisition LLC's (doing business as Consilio) B3 corporate family rating and B3-PD probability of default rating in connection with the company's announcement to acquire a U.S.-based eDiscovery services provider.

The company plans to use proceeds from an incremental $150 million first-lien term loan, along with modest balance sheet cash and new sponsor equity to finance the acquisition and pay associated transaction expenses.

Concurrently, Moody's said it affirmed the B2 ratings on the company's first-lien credit facility, consisting of a $50 million revolving credit facility and $575 million first lien term loan (including the proposed $150 million incremental facility), and the Caa2 rating on its $140 million second-lien term loan. The outlook remains stable.

“The proposed transaction is credit negative and very aggressive as it substantially increases Consilio's funded debt and elevates execution risk because the company is undertaking another large debt-funded transaction in a relatively short period that will require significant cash outlays to achieve cost savings,” Moody’s said in a news release.

Moody's is nevertheless affirming the B3 CFR and maintaining the stable outlook because debt-to-EBITDA leverage is projected to trend toward 6.0 times by year-end 2019 as a result of synergy realization, decline in integration expenses and modest organic growth, the agency said.

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