Research Update: Aegis Toxicology Sciences Corp. 'B' Corporate Credit Rating Affirmed, Outlook Remains Negative; New Debt Rated

U.S.-based provider of toxicology laboratory services Aegis Toxicology Sciences Corp. announced its plan to raise a new $50 million revolving credit facility as well as a $320 million first-lien term loan to repay its existing first- and second-lien term facilities debt and fund its recently announced acquisition of certain assets from fellow lab company Ameritox Ltd. The company has underperformed our cash flow expectations over the past nine months, driven by longer receivables collection cycles and the resulting net increases in working capital. We are affirming our 'B' corporate credit rating on Aegis Toxicology Sciences Corp. The outlook remains negative. We are assigning a 'B' rating and '3' recovery rating to the proposed $320 million term loan and $50 million

...+ U.S.-based provider of toxicology laboratory services Aegis Toxicology Sciences Corp. announced its plan to raise a new $50 million revolving credit facility as well as a $320 million first-lien term loan to repay its existing first- and second-lien term facilities debt and fund its recently announced acquisition of certain assets from fellow lab company Ameritox Ltd. + The company has underperformed our cash flow expectations over the past nine months, driven by longer receivables collection cycles and the resulting net increases in working capital. + We are affirming our 'B' corporate credit rating on Aegis Toxicology Sciences Corp. The outlook remains negative. + We are assigning a 'B' rating and '3' recovery rating to the proposed $320 million term loan and $50 million revolver. + The negative outlook reflects the underlying uncertainty regarding Aegis' projected cash flow, notwithstanding the recent increase to Medicare rates. Our 2018 base-case projections include Aegis sustaining...

Research Update