S&P gives Claranet, loan B

S&P said it gave B ratings to Claranet International Ltd. and its planned €380 million-equivalent senior secured term loan.

The proceeds will be used to repay all its bank debt and provide overfunding for general corporate purposes and bolt-on acquisitions.

“Claranet is the No. 3 provider of cloud IT services in the fragmented European mid-market, behind Rackspace and Neurones-IT. This is its core focus area, from which we estimate that it will generate 53% of revenue in the financial year ending June 30, 2021 (FY2021). It is also well placed to grow in the underserved subenterprise segment,” S&P said in a press release.

The outlook is stable and indicates expectations Claranet will produce 5%-6% organic growth in EBITDA and stable free operating cash flow over the next 12 months, and that debt-funded acquisitions will not cause its adjusted gross leverage to rise above 7x excluding preferred equity (7.8x total leverage), the agency said.

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