Research Update: Austria-Based Distributed Power Provider Al Alpine AT Bidco Assigned 'B' Rating; Outlook Stable

Following the closing of a successful syndication, private equity funds advised by Advent International Corporation have acquired GE Distributed Power, a carve-out of General Electric Company. The deal includes Jenbacher and Waukesha branded engines and manufacturing sites in Austria, the U.S., and Canada. The capital structure will be highly leveraged, with S&P Global Ratings-adjusted debt to EBITDA at around 7.8x at end-2018. We also expect 2019 to be a transitional year with breakeven reported free operating cash flows (FOCF) and lower S&P Global Ratings-adjusted EBITDA margins of around 12%-13% (about 17% expected in 2018), due to carve-out and restructuring related costs of about $108 million. We are assigning our 'B' issuer credit rating to AI Alpine AT BidCo GmbH. We

...+ Following the closing of a successful syndication, private equity funds advised by Advent International Corporation have acquired GE Distributed Power, a carve-out of General Electric Company. The deal includes Jenbacher and Waukesha branded engines and manufacturing sites in Austria, the U.S., and Canada. + The capital structure will be highly leveraged, with S&P Global Ratings-adjusted debt to EBITDA at around 7.8x at end-2018. We also expect 2019 to be a transitional year with breakeven reported free operating cash flows (FOCF) and lower S&P Global Ratings-adjusted EBITDA margins of around 12%-13% (about 17% expected in 2018), due to carve-out and restructuring related costs of about $108 million. + We are assigning our 'B' issuer credit rating to AI Alpine AT BidCo GmbH. + We are assigning our 'B' issue rating and '3' recovery rating to the $1,525 million equivalent seven-year first lien term loan B and $225 million 6.5-year revolving credit facility (RCF). We are also assigning our...

Research Update