S&P rates CM Cheetah, loan B

S&P said it assigned B ratings to CM Cheetah LP and its planned $590 million seven-year first-lien term loan. CM Cheetah also plans to obtain a $45 million revolver. Campaign Monitor Finance Pty Ltd. and Finco US will be the co-borrowers on the term loan.

CM Group plans to merge with Cheetah Digital. The company’s pro forma S&P Global Ratings'-adjusted debt to EBITDA is expected to be about 6.5x-7x, the agency said. Sponsors will provide about $1.7 billion of common equity.

“The rating primarily reflects the highly fragmented and competitive nature of the email marketing industry, the company's low market share, execution risk associated with aggressive cost-cutting, and S&P Global Ratings'-adjusted leverage above 5x for the next few years. Partially offsetting these factors are the company's sticky customer base, highly recurring subscription-based revenues and modest ongoing capital spending requirements, resulting in favorable cash flow conversion rates,” the agency said in a press release.

The outlook is stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.