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Moody’s revises Canyon to negative
Moody's Investors Service said it affirmed Canyon Cos., Sarl's corporate family rating of B2 and revised the outlook to negative from stable.
The ratings of the first- and second-lien debt (held at subsidiary GTCR Valor Cos., Inc.) were also affirmed.
Moody’s said the outlook change was driven by the announcement of Canyon’s largely debt-financed acquisition of Gorkana. The acquisition was funded using incremental first- and second-lien debt of $170 million and $65 million, respectively, as well as additional sponsor equity and a modest amount of balance sheet cash.
Though the acquisition provides Canyon with a strong complementary product offering in the United Kingdom and enhanced scale, the management team faces significant challenges with respect to the restructuring and integration of the company's operations and software platforms, the agency said.
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