S&P rates Huws Gray, loan B

S&P said it gave B ratings to Patagonia Holdco 3 Ltd. (Huws Gray) and its planned £950 million-equivalent term loan.

Blackstone acquired Huws Gray and the company is also acquiring Grafton plc’s general builders merchant for an enterprise value of £520 million. Huws Gray also plans to secure a £125 million revolver, of which £50 million will be subject to delayed draw and fully available upon the deal’s close.

“The combined group will benefit from a strong market position in the U.K. GBM market, but scale will lag larger distributors. Adding Grafton's GBM business to that of Huws Gray will nearly triple the number of branches to 315 from 114, making it the No. 3 player. It will still lag the No. 1 player, Travis Perkins, which has 1,700 branches; and Jewson, which has 500 branches across the U.K.,” S&P said in a press release.

The stable outlook mirrors the forecast for the company to sustain S&P Global Ratings-adjusted debt to EBITDA below 6.5x, supported by moderate growth in EBITDA, the agency said.

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