...NEW YORK (S&P Global Ratings) Nov. 22, 2016--S&P Global Ratings said today that its ratings on Dr Pepper Snapple Group Inc. (DPS) are not affected by the company's announcement that it has reached an agreement to acquire Bai Brands LLC for a cash purchase price of $1.7 billion without changing its shareholder distribution policies. Although we anticipate the company will likely finance the acquisition with debt, we do not believe it will lead to high enough leverage to cause a downgrade. We previously indicated we could downgrade the company if sustained debt to EBITDA at or above 3x. Based on our preliminary estimates we believe pro-forma debt to EBITDA for this transaction will total about 2.8x, from which the company would likely modestly reduce leverage despite making ongoing shareholder distributions in line with recent historical levels. DPS benefits from strong and stable profit margins, above-average volume growth in several brands across its carbonated and noncarbonated portfolios,...
