S&P rates Eco Material, notes B

S&P said it gave B ratings to Eco Material Technologies Inc. and its planned $500 million of senior secured notes due 2027.

“The company's brief operating history, on a stand-alone basis, and its relatively small size compared with more highly rated building materials companies are key business risks that are only partly offset by our expectation for solid profit margins in 2022 and 2023. We forecast the combined companies' annual sales in the $500 million to $600 million range in each of the next two years,” S&P said in a press release.

“We expect Eco Material to be aggressively leveraged over the next two years, but not egregiously so compared with many other private equity-owned firms. The company will fund the $735 million acquisition of the Boral fly ash business primarily with proposed $500 million senior secured note offering plus $236 million of cash from the private equity sponsors,” the agency added.

The outlook is stable.

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