Research Update: ICON PLC Outlook Revised To Positive From Stable On Faster-Than-Expected Deleveraging; Affirmed At 'BB+'

ICON's successful integration of PRA Health Sciences has supported stronger operational performance in 2021 and year-to-date 2022, with more than double the initially planned cost-synergies expected and potential to repay about $800 million of debt before year-end. As a result, we project ICON will deleverage to S&P Global Ratings-adjusted debt to EBITDA of 3.0x at end-2022, versus the 3.5x we anticipated previously, and that its margins will strengthen past 18% this year and near 19% in 2023. We therefore revised our outlook on ICON to positive from stable and affirmed the 'BB+' issuer credit rating. We also affirmed our 'BB+' issue rating, with a '3' recovery rating, on ICON's senior secured debt. The positive outlook reflects the possibility of an

...- ICON's successful integration of PRA Health Sciences has supported stronger operational performance in 2021 and year-to-date 2022, with more than double the initially planned cost-synergies expected and potential to repay about $800 million of debt before year-end. - As a result, we project ICON will deleverage to S&P Global Ratings-adjusted debt to EBITDA of 3.0x at end-2022, versus the 3.5x we anticipated previously, and that its margins will strengthen past 18% this year and near 19% in 2023. - We therefore revised our outlook on ICON to positive from stable and affirmed the '##+' issuer credit rating. We also affirmed our '##+' issue rating, with a '3' recovery rating, on ICON's senior secured debt. - The positive outlook reflects the possibility of an upgrade if ICON deleverages below 3x S&P Global Ratings-adjusted debt to EBITDA, strengthens its funds from operations (FFO) to debt to around 30%, and maintains these levels over the coming few years....

Research Update