S&P ups Apergy, rates loan BBB-

S&P said it upgraded Apergy Corp., which will combine with Ecolab Inc.’s ChampionX upstream energy business in a Reverse Morris Trust deal and become ChampionX Corp.

The agency raised Apergy and its notes to BB with a 3 recovery rating (65%) and its term loan to BBB- with a 1 recovery rating (95%).

“The upgrade reflects the combined company's significantly increased scale, including increased revenues and EBITDA, and geographic diversity. The combined entity, which will be renamed ChampionX, will have only 16% of its revenues tied to E&P drilling and completion activity through its drilling tech and specialty performance segments, while the remaining 84% of revenue will be exposed to less cyclical, recurring production segments, namely oilfield performance chemicals/production and automation technology,” S&P said in a press release.

Also, S&P assigned a BBB- rating to the company’s new term loan with a 1 recovery rating.

All the company’s debt will be cross guaranteed and cross-collateralized, S&P said.

The outlook is negative.

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