Research Update: Akita Midco Sarl, Parent Of Chemical Distributor Azelis, Rated 'B'; Outlook Stable

Chemical and food ingredient distributor Azelis has been acquired by private equity EQT VIII fund (EQT) and the Public Pension Investment Board (PSP). The financing package is in line with our preliminary assumptions, including €1.1 billion in term loans. Furthermore, the first-lien debt at Azelis Finance S.A. has been fully repaid. We forecast Azelis will report about 7x adjusted debt to EBITDA in 2018, although we expect that profit growth and free cash flow generation should help reduce leverage in the coming years. We are therefore assigning our 'B' issuer credit rating to Akita Midco Sarl, parent of Azelis, and assigning our 'B' issue ratings to Akita's first-lien debt. The stable outlook on Akita Midco Sarl reflects our expectation of

...+ Chemical and food ingredient distributor Azelis has been acquired by private equity EQT VIII fund (EQT) and the Public Pension Investment Board (PSP). + The financing package is in line with our preliminary assumptions, including 1.1 billion in term loans. Furthermore, the first-lien debt at Azelis Finance S.A. has been fully repaid. + We forecast Azelis will report about 7x adjusted debt to EBITDA in 2018, although we expect that profit growth and free cash flow generation should help reduce leverage in the coming years. + We are therefore assigning our 'B' issuer credit rating to Akita Midco Sarl, parent of Azelis, and assigning our 'B' issue ratings to Akita's first-lien debt. + The stable outlook on Akita Midco Sarl reflects our expectation of the group's positive free cash flow in the coming years and favorable interest coverage ratios. + We are withdrawing our ratings on the repaid debt and the issuing entity, Azelis Finance S.A. + The final ratings are in line with the preliminary...

Research Update