Moody's eyes Diversey for downgrade

Moody's Investors Service said it placed Diamond (BC) BV's (Diversey) B2 corporate family rating, B2-PD probability of default rating, Ba3 senior secured bank credit facilities and Caa1 senior unsecured notes under review for downgrade. The SGL-2 speculative grade liquidity rating is unchanged.

The review follows the announcement by the company it agreed to be acquired by Solenis (Olympus Water US Holding Corp.) for an enterprise value of $4.6 billion, including Diversey's debt.

The transaction is subject to Diversey shareholder and regulatory approval and is expected to close in the second half of 2023. Bain Capital, which owns about 73% of Diversey, has agreed to vote for the deal. Moody’s said it expects Diversey’s debt to be repaid because of the change of control provisions in the credit pact and bond indenture.

“The placement of ratings under review for downgrade reflects the lack of information regarding the funding of the transaction and the ultimate capital structure of the combined entity, despite improving scale and business profiles given the complementary nature of both businesses both in terms of products and geographic concentration,” Moody’s said in a press release.

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