Research Update: Germany-Based Manufacturer Of Electric Motors And Drives Innomotics Assigned Preliminary 'B' Rating; Outlook Stable

Germany-based Dynamo Midco B.V. (Innomotics), a leading global manufacturer of low-to-high-voltage motors, medium-voltage drive (MVD) systems, and related services and solutions, has been spun off from Siemens AG and acquired by private-equity company KPS Capital Partners LP for €3.5 billion. In our base-case scenario, we expect Innomotics to generate revenue of about €3.1 billion in fiscal 2025 (year ending Sept. 30), but increase its S&P Global Ratings-adjusted EBITDA margins (including restructuring and carve-out related costs) to 10.5%-11.0% from 7.0%-7.5% in fiscal 2024, thanks to streamlined operations, lower restructuring and carve-out related costs, better pricing strategies, and the expansion of its profitable services business. We rate Innomotics based on the proposed capital structure, consisting of about €1.8 billion credit facilities (excluding

...- Germany-based Dynamo Midco B.V. (Innomotics), a leading global manufacturer of low-to-high-voltage motors, medium-voltage drive (MVD) systems, and related services and solutions, has been spun off from Siemens AG and acquired by private-equity company KPS Capital Partners LP for 3.5 billion. - In our base-case scenario, we expect Innomotics to generate revenue of about 3.1 billion in fiscal 2025 (year ending Sept. 30), but increase its S&P Global Ratings-adjusted EBITDA margins (including restructuring and carve-out related costs) to 10.5%-11.0% from 7.0%-7.5% in fiscal 2024, thanks to streamlined operations, lower restructuring and carve-out related costs, better pricing strategies, and the expansion of its profitable services business. - We rate Innomotics based on the proposed capital structure, consisting of about 1.8 billion credit facilities (excluding a 400 million revolver and 300 million or greater guarantee facility). This translates into an S&P Global Ratings-adjusted debt-to-EBITDA...

Research Update