Research Update: Aegion Corp. Assigned 'B' Rating, Outlook Stable; Credit Facility Rated 'B'

Aegion Corp., a St. Louis, Mo.-based backward integrated specialty construction company that includes engineering and manufacturing, has entered into an agreement to be acquired by New Mountain Capital LLC. We assigned our 'B' issuer credit rating to Aegion. The outlook is stable. We also assigned our 'B' issue-level rating and '3' recovery rating to the company's proposed $75 million revolving credit facility and $650 million first-lien term loan, indicating our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. The stable outlook reflects our view that the company will benefit from its stable backlog of work and our expectation that adjusted debt-to-EBITDA will decline below 6.5x, with free operating cash flow (FOCF)-to-debt in the

...- Aegion Corp., a St. Louis, Mo.-based backward integrated specialty construction company that includes engineering and manufacturing, has entered into an agreement to be acquired by New Mountain Capital LLC. - We assigned our 'B' issuer credit rating to Aegion. The outlook is stable. - We also assigned our 'B' issue-level rating and '3' recovery rating to the company's proposed $75 million revolving credit facility and $650 million first-lien term loan, indicating our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. - The stable outlook reflects our view that the company will benefit from its stable backlog of work and our expectation that adjusted debt-to-EBITDA will decline below 6.5x, with free operating cash flow (FOCF)-to-debt in the mid-single-digit percent area....

Research Update