Research Update: EnPro Industries Inc. Ratings Affirmed On LeanTeq Acquisition, Outlook Stable; Senior Unsecured Recovery Rating Revised

EnPro Industries Inc. has agreed to acquire semiconductor equipment cleaning service firm LeanTeq Co. and completed a smaller acquisition of The Aseptic Group on July 2, 2019. The combined purchase price is approximately $345 million, which the company will fund with incremental secured debt and cash on hand. We view these transactions as consistent with EnPro's capital allocation strategy. Although we forecast that the acquisitions will increase the company's leverage by about one turn, we do not expect it to undertake additional significant acquisitions over the next 12 months, which will allow it to maintain credit measures in line with our expectations for the current rating. We are affirming all of our ratings on EnPro. At the same time, we

...- EnPro Industries Inc. has agreed to acquire semiconductor equipment cleaning service firm LeanTeq Co. and completed a smaller acquisition of The Aseptic Group on July 2, 2019. The combined purchase price is approximately $345 million, which the company will fund with incremental secured debt and cash on hand. - We view these transactions as consistent with EnPro's capital allocation strategy. Although we forecast that the acquisitions will increase the company's leverage by about one turn, we do not expect it to undertake additional significant acquisitions over the next 12 months, which will allow it to maintain credit measures in line with our expectations for the current rating. - We are affirming all of our ratings on EnPro. - At the same time, we are revising our recovery rating on the company's $350 million senior unsecured notes to '4' from '3' to reflect the increased amount of secured debt in its capital structure. - The stable outlook reflects our view that EnPro will maintain...

Research Update