S&P rates Centerfield Media Parent B

S&P said it assigned B ratings to Centerfield Media Parent Inc. and its planned $785 million of senior secured notes due 2026. The recovery rating on the notes is 3.

“Our B rating on Centerfield reflects its participation in a highly competitive and fragmented industry with low barriers to entry, its considerable customer and sector concentration, uncertainty in operating performance because of its pay-for-performance business model, its relatively small scale of operations, and its financial-sponsor ownership. We expect the company will continue to pursue debt-funded acquisitions, which will keep leverage above 5x,” S&P said in a press release.

Centerfield plans to use the proceeds to refinance its debt and help it acquire Datalot for $435 million.

S&P assigned a stable outlook. The outlook reflects an expectation that free operating cash flow (FOCF) to debt will increase back above 5% over the next 12 months “We expect leverage will be temporarily elevated above 10x in 2021 due to sizable transaction expenses,” the agency said.

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