S&P puts Solenis on developing watch

S&P said it placed all its Olympus Water Holdings IV LP (Solenis) ratings, including the B- issuer and debt ratings, on CreditWatch with developing implications.

The CreditWatch placement follows Solenis announcing it agreed to buy Diversey Holdings Ltd. for about $4.6 billion in an all-cash transaction.

“Based on the announcement, we expect the transaction to close in the second half of 2023; however, we expect to have further clarity regarding plans to fund the transaction and the proposed debt level, and structure of the newly created entity within the next few months. We placed our B- issuer credit rating on Solenis on CreditWatch with developing implications to reflect that we may affirm, lower, or raise our rating on the company depending on our assessment of the effect the transaction could have on the company's financial and business risk profiles,” S&P said in a press release.

“If the deal goes ahead as planned, Solenis' credit quality might benefit from a combination with Diversey's stronger business, but on the other hand, a potentially leveraging deal with unsustainable levels of debt, combined with integration risk would be a credit negative. We expect to resolve the CreditWatch placement in the coming months as we have further clarification on the combined capital structure and a clearer view of the combined entities' business,” the agency added.

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