S&P rates Omnia Partners loans B, CCC+

S&P said it assigned its B corporate credit rating to Omnia Partners Inc. The outlook is stable.

At the same time, S&P said it assigned a B issue-level rating to the company's proposed $30 million revolving credit facility due 2023 and $390 million first-lien term loan due 2025. The recovery rating on the first-lien debt is 3, indicating an expectation of meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default.

S&P also assigned a CCC+ issue-level rating to the company's proposed $145 million second-lien term loan due 2026. The recovery rating is 6, indicating an expectation of negligible (0%-10%; rounded estimate: 0%) recovery in the event of a payment default. The borrower of the debt is National Intergovernmental Purchasing Alliance Co.

“Our ratings reflect Omnia’s small size in a fairly new and largely underpenetrated public spending market, with few participants and relatively low cyclicality. It also reflects its supplier concentration and limited pricing power,” S&P said in a news release.

“Partially offsetting these negative factors are the experienced senior management team (20+ years in the GPO space), the company's high operating margins, and an established network of suppliers and customers, with plentiful opportunities for increasing scale and organic growth to expand its top line.”

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