S&P rates Concord Midco, loans B-

S&P said it rated Concord Midco Ltd. and its €585 million of first-lien loans B-. The loans will be issued to Concord Lux Sarl.

Francisco Partners recently completed the financing for its acquisition of CDK International, which it acquired from CDK Global Inc. It will be owned by Concorde Midco and be rebranded as Keyloop.

“FP's acquisition of Keyloop is funded by a combination of debt and equity, giving it a highly leveraged capital structure. Adjusted debt to EBITDA is expected to spike to above 10x in FY2021 and revert to just below 9x in FY2022 – this includes the exceptionally high restructuring costs and considers capitalized development costs as expenses,” S&P said in a press release.

The outlook is stable. S&P said the outlook indicates that revenue is expected to dip 1%-3% in the financial year ending June 30, before reverting to growth of 1%-3% in FY2022. “Cost-saving initiatives are expected to boost its S&P Global Ratings-adjusted EBITDA margins, enabling adjusted debt to EBITDA to fall below 9x within the next two years,” the agency said.

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