Moody’s reviews Knowlton Development for cut

Moody’s Investors Service said it placed Knowlton Development Corp.’s ratings under review for downgrade. This follows the company’s announced partially debt financed merger with HCT Group. Management expects the closing of the merger to occur by the end of the first quarter in 2020.

Moody’s said its review will focus on the impact of the transaction on Knowlton’s capital structure, as well as underlying operating trends for both companies. The review will also consider the liquidity and forward looking cash flow of the combined company as well as the company’s plans to reduce acquisition debt.

The review will also focus on the potential benefits of the combined firm’s larger scale and the larger suite of manufacturing and packaging solutions the company will be able to offer its clients.

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