Red Ventures HoldCo L.P.

Overview Key strengths Key risks Higher proportion of self-owned and operated websites results in higher profitability compared to its digital advertising peers. Elevated leverage due to the company pursuing an acquisitive growth strategy. Well-known brands generate a high amount of organic internet traffic. Pay-for-performance business model exposes company to earnings volatility. Strong cash flow generation. An economic recession could result in earnings pressure given an increased risk of advertising budget cuts and consumer spending declines. Red Ventures HoldCo L.P. has a history of large debt-funded acquisitions, including CNET Media Group, Bankrate, and most recently, Healthgrades. Acquisition spending has totaled $2.5 billion over the last three years, the majority of it debt funded. We expect the company may continue to be

...S&P Global Ratings-adjusted net leverage remained elevated above 5x the last two years due to the company pursuing an acquisitive growth strategy. Red Ventures HoldCo L.P. has a history of large debt-funded acquisitions, including CNET Media Group, Bankrate, and most recently, Healthgrades. Acquisition spending has totaled $2.5 billion over the last three years, the majority of it debt funded. We expect the company may continue to be acquisitive, although it has a track record of successfully integrating its acquisitions into its current business and increasing the monetization rates of its acquired entities, its strategy still exposes it to integration and execution risk that could pressure credit metrics and delay deleveraging. However, absent any large debt-funded...

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