American Builders&Contractors Supply Co. Inc. (ABC Supply) has announced that it has entered into a definitive agreement to purchase USG Corp.'s building product distribution subsidiary, L&W Supply Corp. for approximately $670 million. ABC Supply plans to issue $400 million of new debt to partially fund the purchase, resulting in pro-forma debt/EBITDA leverage between 4.5x and 5x. The company expects to complete the transaction before the end of 2016. As a result, we are placing our ratings, including our 'BB' corporate credit rating, on ABC Supply on CreditWatch with negative implications. We expect to resolve the CreditWatch placement after reviewing the impact of the acquisition on ABC Supply's financial and business risk profiles and the company's financial policy targets
