Moody's assigns B2 to Kronos, loans

Moody's Investors Service said it assigned a B2 corporate family rating and B2-PD probability of default rating to KronosNet CX Bidco 2022, SL. Concurrently, Moody's gave a B2 instrument rating to the planned €350 million guaranteed senior secured term loan A, the planned €450 million guaranteed senior secured term loan B and the proposed €175 million guaranteed senior secured revolving credit facility to be raised by the company.

Term loan proceeds will be used as part of the financing package for the acquisition of Comdata SpA by Giralda Holding Conexion, SLU (Konecta); the remaining capital structure consists of €1.2 billion equity and around €250 million in rolled-over debt and lease obligations. Shareholder loans issued by CX VIII Luxco Sarl as part of the transaction meet Moody's criteria to be treated as equity, the agency said.

The acquisition is expected to close in October after customary approvals. Intermediate Capital Group (ICG) will own 78% of the company going forward while 22% of the shares will be held by the company's founders and management team.

“The combination of Konecta and Comdata creates a significantly larger, leading pan-European and LatAm CX BPO player, with FY21A pro forma revenues of €1.891 billion and company-adjusted EBITDA of €278 million PF 2021. Scale is very important in this industry to maintain customer relationships and grow globally with them. By nearly doubling its size Konecta becomes the number six player globally, significantly improving its business profile. Moody's-adjusted debt/EBITDA is around 5.6x on a 2021 pro forma basis and will decrease marginally to around 5.5x in 2022 on a pro forma basis. Moody's expects leverage to decrease towards 4.5x in the next 12-18 months,” the agency said in a press release.

The outlook is stable.

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