Moody’s rates Groundworks, facility B3

Moody's Investors Service said it assigned first-time ratings to Groundworks, LLC, including a B3 corporate family rating, and a B3-PD probability of default rating and a B3 rating to Groundworks' planned senior secured first-lien bank credit facility. The outlook is stable.

Groundworks' capital structure will consist of a $65 million senior secured first-lien revolver due in 2029, an $815 million senior secured first-lien term loan maturing in 2031, and a $150 million senior secured first-lien delayed-draw term loan due 2031.

“The B3 CFR reflects the company's high leverage and its growth through debt-funded acquisition strategy, which adds execution and integration risk. Groundworks' industry is fragmented with low barriers to entry, which also increases the likelihood of future consolidation. The company's service offering is also largely one-time in nature, which creates the need to acquire customers,” Moody’s said in a press release.

Groundworks will use the term loan to repay debt.

The stable outlook reflects the expectation that Groundworks will continue to add market share from smaller providers and de-lever modestly in 2024 and 2025, Moody’s said.

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