Bulletin: Archer Daniels Midland Co. Ratings Are Unaffected By Its Proposed Acquisition Of Neovia

NEW YORK (S&P Global Ratings) July 2, 2018--S&P Global Ratings said today that its ratings on Chicago-based Archer Daniels Midland Co. (ADM) are not affected by its announced proposed acquisition of Neovia for €1.5 billion in cash. We estimate the acquisition will increase pro forma debt to EBITDA closer to 3x compared with a ratio of about 2.6x for the 12 months ended March 31, 2018. Although the company's pro forma leverage is above our 2.5x downgrade trigger, we do not expect it to stay there as we are projecting a meaningful (greater than 10%) year-over-year rebound in EBITDA in 2018, underpinned by a strong North American outlook for soybean crush margins including a significant unwind of the company's first

...NEW YORK (S&P Global Ratings) July 2, 2018--S&P Global Ratings said today that its ratings on Chicago-based Archer Daniels Midland Co. (ADM) are not affected by its announced proposed acquisition of Neovia for 1.5 billion in cash. We estimate the acquisition will increase pro forma debt to EBITDA closer to 3x compared with a ratio of about 2.6x for the 12 months ended March 31, 2018. Although the company's pro forma leverage is above our 2.5x downgrade trigger, we do not expect it to stay there as we are projecting a meaningful (greater than 10%) year-over-year rebound in EBITDA in 2018, underpinned by a strong North American outlook for soybean crush margins including a significant unwind of the company's first quarter 2018 working capital build, which occurred in part to take advantage of the favorable margin outlook. Moreover, the company remains committed to a balanced approach to managing shareholder returns, currently guiding to repurchase shares only to offset option dilution in...

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