Moody's assigns Ba3 to S4 Capital

Moody's Investors Service said it assigned a Ba3 corporate family rating and a Ba3-PD probability of default rating to S4 Capital plc. Concurrently, Moody's gave a Ba3 rating to the planned €375 million guaranteed senior secured term loan B to be issued by S4 Capital LUX Finance Sarl, and £100 million guaranteed senior secured revolver to be obtained by S4 Capital 2 Ltd. and co-borrowed by subsidiaries including S4 Capital Acquisitions 1 Ltd., S4 Capital Acquisitions 2 Ltd., S4 Capital Acquisitions 3 BV and S4 Capital US Holdings LLC.

“"The Ba3 CFR reflects S4 Capital's solid EBITDA growth prospects supported by the fast-growing digital marketing industry trends. We believe S4 Capital is well-placed to deliver on its business plan of doubling revenues and EBITDA organically over 2021-2023 driven by its differentiated business model and an experienced management team, although competition in the industry remains intense," said Gunjan Dixit, a Moody’s vice president, senior credit officer and lead analyst on S4 Capital, in a press release.

“We expect a moderate Moody's-adjusted gross debt/EBITDA of around 4.2x for S4 Capital at the end of 2021 with a healthy cash buffer to fund future add-on merger transactions,” Dixit added.

The proceeds, after repaying the group's £87 million of debt, will be used to fund general corporate purposes including future investments and mergers.

The outlook is stable.

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