International Flavors&Fragrances Inc. Ratings Lowered Following Frutarom Acquisition; Outlook Stable

U.S.-Based International Flavors&Fragrances Inc. (IFF) has priced the $2.25 billion equity offering to partially finance its $7.1 billion acquisition of Frutarom, and has launched the marketing of its note offering. IFF has also received the majority of its regulatory approvals. The acquisition will improve IFF's product diversity, enhance its presence in natural products, and increase its focus on small to mid-sized customers, but it will also substantially increase IFF's debt obligations and weaken credit measures, including pro forma debt-to-EBITDA of 4.5x. We lowered our issuer credit and senior unsecured debt ratings on IFF to 'BBB' from 'BBB+', and affirmed the short-term and commercial paper ratings at 'A-2'. We also removed the long-term ratings from CreditWatch with negative implications,

...+ U.S.-Based International Flavors & Fragrances Inc. (IFF) has priced the $2.25 billion equity offering to partially finance its $7.1 billion acquisition of Frutarom, and has launched the marketing of its note offering. IFF has also received the majority of its regulatory approvals. + The acquisition will improve IFF's product diversity, enhance its presence in natural products, and increase its focus on small to mid-sized customers, but it will also substantially increase IFF's debt obligations and weaken credit measures, including pro forma debt-to-EBITDA of 4.5x. + We lowered our issuer credit and senior unsecured debt ratings on IFF to '###' from '###+', and affirmed the short-term and commercial paper ratings at 'A-2'. We also removed the long-term ratings from CreditWatch with negative implications, where we placed them on May 7, 2018. + The stable outlook reflects our belief that the company will successfully integrate Frutarom and prioritize debt repayment given our substantial...

Ratings Action