S&P rates Kofax loans B, CCC+

S&P said it gave the planned first-lien term loans and proposed second-lien term loan to be borrowed by Kofax Parent Inc. unit Project Leopard Holdings Inc. B and CCC+ ratings, respectively. The agency also revised Kofax’s outlook to negative from stable and affirmed its B issuer rating.

Clearlake Capital and TA Associates are buying Kofax in a secondary buyout that will add more than $300 million in debt, resulting in closing leverage of about 7.1x based on 2021 EBITDA, S&P said.

“The outlook revision reflects the greater debt burden, with leverage rising slightly above 7x from Kofax's recent operating range of about 6x, and potential execution risks related to the recurring revenue transition. We expect Kofax's strategy to accelerate its recurring revenue model to also constrain revenue growth over the next few years due to a marked reduction in perpetual license revenues,” the agency said in a press release.

S&P said it sees cash interest climbing by $25 million to $30 million in 2022, which would depress free operating cash flow to $55 million to $60 million.

© 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.