S&P rates Syneos, loan, notes B

S&P said it assigned B ratings to Syneos Health Inc. (Star Parent Inc.), its planned $2 billion first-lien term loan due 2030 and $1.7 billion of senior secured notes due 2030. The recovery ratings on the loans and notes are 3 (50%-70%; rounded estimate: 50%). The company also plans to obtain an unrated $500 million credit facility due 2028. The outlook is positive.

A group of private investment firms plan to buy Syneos and repay its debt.

“Syneos is the fourth largest contract research organization (CRO) in the $60 billion market and the second largest contract commercial organization (CCO) in the $30 billion market. The company has a strong competitive position in the large pharmaceutical space (55% of revenues) and the small- to medium-sized (SMID) pharmaceutical client sector (45%). Longer term, we expect mid- to high-single-digit market growth due to underlying demand for pharmaceuticals, continued outsourcing, increasingly complex clinical trials, and expanding regulatory requirements,” S&P said in a press release.

The positive outlook mirrors projections that net awards will continue to improve from historically weaker awards over the past 12 months, the agency said.

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