Texas-based Commercial Metals Co. ?s (CMC) leverage will increase following the recently announced acquisitions of Foley Products Co. and Concrete Pipe&Precast (CP&P). However, we expect it to decline toward 2.5x over the next 12 months. The acquisitions immediately establish CMC?s foothold in the precast concrete market, expanding its nonsteel product portfolio with complementary offerings and increasing its product diversity and scale in the construction market. Still, its product concentration and relative size versus other steel peers are considerations for our rating. We affirmed our ratings on CMC, including our ?BB+? issuer and issue-level ratings. The stable outlook reflects our expectation that, following the close of the acquisitions, leverage will increase above 3x and trend toward 2.5x by the
