S&P pulls SCIH from developing watch

S&P said it affirmed all its ratings for SCIH Salt Holdings Inc. and removed them from CreditWatch, where it placed them with developing implications on Feb. 9.

SCIH is buying K+S Americas’ operating unit (OU Americas), including Morton Salt, for $3.2 billion. The company will fund the acquisition and repay its $200 million second-lien term loan mostly with $2.7 billion of debt and $993 million of equity from its sponsor.

“The acquisition is transformational and improves our view of SCIH’s competitive position, though there are integration risks associated with an acquisition of this size. The combined company will be the largest salt company in the world with anticipated pro forma revenue of about $2 billion and annual capacity of 29 million tons, which compares with about $430 million and 5 million tons, respectively, in 2020,” S&P said in a press release.

The agency said it forecasts SCIH’s leverage to remain above 7x over the next 12 months.

The outlook is stable.

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