Moody's affirms Quorum on add-ons

Moody's Investors Service said it affirmed QBS Parent, Inc.'s B3 corporate family rating and B3-PD probability of default rating, along with the B2 (LGD 3) ratings on its senior secured first-lien debt, including an upsized $35 million revolving credit facility and an upsized $334 million term loan.

QBS Parent does business as Quorum, Moody's said.

The proceeds from a $90 million tack-on to Quorum's existing first-lien term loan, $40 million tack-on to an existing $85 million second-lien term loan and incremental common equity from financial sponsor Thoma Bravo will be used for Quorum's acquisition of Coastal Flow Measurement, Moody's said.

The purchase price represents an 8.5 times multiple of Coastal Flow's adjusted 2018 EBITDA, while the deal's debt component renders Quorum's overall pro forma adjusted debt-to-EBITDA ratio little changed at just less than 8x.

The outlook is stable.

The ratings reflect Quorum's very high 8x debt-to-EBITDA leverage pro forma for the acquisition, a level that is unchanged since Thoma Bravo purchased Quorum in late 2018, Moody's said.

The new company will also boost Quorum's top line by more than 40%, changing the company's complexion as it will now derive a larger part of its revenue from operationally focused services along the energy process chain, the agency said.

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