S&P rates McKissock, loans B-

S&P said it rated McKissock Investment Holdings LLC (Colibri Group) and its planned $400 million term loan and $30 million revolver B-. The loans’ recovery rating is 3. The agency also assigned a stable outlook.

“The issuer credit rating reflects Colibri's relatively small size in a highly fragmented professional education solutions industry, significant exposure to cyclical end markets, aggressive financial policy prioritizing debt-funded acquisitions and shareholder distributions over debt repayment, and acquisition-related integration risks,” S&P said in a press release.

Colibri plans to use the term loan proceeds and cash to repay its debt, fund a $119 million dividend to its financial sponsors and pay related fees.

“The stable outlook reflects our expectation that Colibri's organic growth will stabilize in the low- to mid-teens percent area in 2021 as it expands into more markets, and leverage will decline although still remain elevated at about 7x over the next 12 months,” S&P said.

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