Cox Enterprises Inc. 'BBB/A-2' Rating Outlook Revised To Negative On Its Plan To Acquire Dealertrack Technologies Inc.

U.S. diversified media and cable provider Cox Enterprises Inc. announced today that it has entered into a definitive agreement to acquire Dealertrack Technologies Inc. for about $4.65 billion through its subsidiary Cox Automotive. We expect the transaction will be funded with about $3.9 billion of new debt as well as $750 million of common equity from BDT Capital Partners. Pro forma for the transaction, we estimate that adjusted leverage will be about 3.3x for Cox, declining to around 3x by year-end 2016. We are revising our outlook to negative from stable and affirming the 'BBB' corporate credit ratings on Cox Enterprises and Cox Communications Inc. The negative outlook reflects our view that pro forma leverage of around 3.3x is high

...+ U.S. diversified media and cable provider Cox Enterprises Inc. announced today that it has entered into a definitive agreement to acquire Dealertrack Technologies Inc. for about $4.65 billion through its subsidiary Cox Automotive. + We expect the transaction will be funded with about $3.9 billion of new debt as well as $750 million of common equity from BDT Capital Partners. + Pro forma for the transaction, we estimate that adjusted leverage will be about 3.3x for Cox, declining to around 3x by year-end 2016. + We are revising our outlook to negative from stable and affirming the '###' corporate credit ratings on Cox Enterprises and Cox Communications Inc. + The negative outlook reflects our view that pro forma leverage of around 3.3x is high for the rating level and incorporates our uncertainty about the company's willingness to reduce leverage over the next two years. The negative outlook also reflects our view that the company's business risk profile will diminish modestly from its...

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