S&P raises Kodiak Business

S&P said it upgraded Kodiak Building Partners Inc. and its issue rating to B from B-.

“We expect adjusted leverage of 4x-5x over the next 12 months despite increased debt from a recent dividend. Kodiak issued a $200 million add-on to its first-lien term loan B to fund a $200 million shareholder dividend in December 2021. We anticipate the additional debt increased leverage to about 4.2x for fiscal 2021 compared to 3.3x for the 12 months ended Sept. 30, 2021. Over the next 12 months we expect Kodiak to maintain debt leverage of 4x-5x-5x although we have incorporated about $75 million in acquisitions and $100 million in dividends,” S&P said in a press release.

S&P forecasts Kodiak to deliver free operating cash of about $60 million to $70 million in 2022. The agency projects the company will report an earnings increase in 2021 of more than 80% and rise 1%-5% on organic and acquisition growth in 2022.

The outlook is stable.

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