Research Update: Hyland Software Inc. Ratings Affirmed On Acquisition Of Nuxeo Group, Outlook Stable

Hyland Software Inc., a U.S.-based developer of content services platform (CSP) software, is acquiring Nuxeo Group. The company expects to fund the acquisition with an incremental $110 million first-lien term loan, an incremental $150 million second-lien term loan, and cash from its balance sheet. While we expect Hyland's pro forma adjusted leverage (including $477 million of preferred equity) to be elevated in the mid-9x area as of the close of the transaction, up from 8.8X currently, its free operating cash flow (FOCF)-to-debt ratio in the 4%-5% range will provide it with some credit protection. We affirmed all of our ratings on Hyland Software Inc., including our 'B-' issuer credit rating. The stable outlook reflects our expectation that the company's cost-cutting

...- Hyland Software Inc., a U.S.-based developer of content services platform (CSP) software, is acquiring Nuxeo Group. The company expects to fund the acquisition with an incremental $110 million first-lien term loan, an incremental $150 million second-lien term loan, and cash from its balance sheet. - While we expect Hyland's pro forma adjusted leverage (including $477 million of preferred equity) to be elevated in the mid-9x area as of the close of the transaction, up from 8.8X currently, its free operating cash flow (FOCF)-to-debt ratio in the 4%-5% range will provide it with some credit protection. - We affirmed all of our ratings on Hyland Software Inc., including our 'B-' issuer credit rating. - The stable outlook reflects our expectation that the company's cost-cutting efforts will improve its EBITDA margins and reduce its leverage toward the high-8x range by the end of 2021....

Research Update