Amentum Holdings LLC Upgraded To 'BB-' From 'B' On Proposed All-Stock Merger With Jacobs Businesses; Outlook Stable

Amentum Holdings LLC entered into a definitive agreement to merge with Jacobs Solutions Inc.'s Critical Mission Solutions (CMS) and Cyber&Intelligence (C&I) businesses and operate as a publicly traded company. Amentum will fund the transaction with new debt, an $850 million revolving credit facility (unrated) due in 2029 and total debt commitments of $4.75 billion, including a $3.5 billion first-lien term loan due in 2031. A portion of the debt proceeds will be used to fund a $1 billion dividend to Jacobs shareholders. We expect the combination will improve Amentum's scale, contract diversification, and ability to compete for business. It will also improve leverage to S&P Global Ratings-adjusted debt to EBITDA of 4.7x in fiscal 2025 from 6.9x at

...July 23, 2024 - Amentum Holdings LLC entered into a definitive agreement to merge with Jacobs Solutions Inc.'s Critical Mission Solutions (CMS) and Cyber & Intelligence (C&I) businesses and operate as a publicly traded company. - Amentum will fund the transaction with new debt, an $850 million revolving credit facility (unrated) due in 2029 and total debt commitments of $4.75 billion, including a $3.5 billion first-lien term loan due in 2031. A portion of the debt proceeds will be used to fund a $1 billion dividend to Jacobs shareholders. - We expect the combination will improve Amentum's scale, contract diversification, and ability to compete for business. It will also improve leverage to S&P Global Ratings-adjusted debt to EBITDA of 4.7x in fiscal 2025 from 6.9x at fiscal year-end 2023 (ended Sept. 30). - We raised our issuer credit rating on Amentum to '##-' from 'B'. We also assigned our '##-' issue rating and '3' recovery rating to the proposed first-lien term loan, indicating our...

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