Research Update: Keter Group B.V. Outlook Revised To Negative On Planned Debt-Funded Acquisition; Ratings Affirmed

Keter Group recently acquired U.S.-based resin consumer goods producer, Adams Manufacturing, as well as assets from U.S.-based United Solutions. The transaction will be largely debt-funded with the issuance of an incremental €95 million term loan B, with a portion of the proceeds being retained by the group to support ongoing operational and liquidity needs. Despite the strategic benefits of these imminent acquisitions, the group's recent underperformance has significantly hit the deleveraging profile and free operating cash flow (FOCF) generation. The challenges faced in the ongoing business transformation--combined with the periodic M&A activity--present notable pressure on the group's debt protection metrics in our forecasts. We are therefore revising the outlook on Keter Group to negative from stable and affirming our 'B'

...+ Keter Group recently acquired U.S.-based resin consumer goods producer, Adams Manufacturing, as well as assets from U.S.-based United Solutions. The transaction will be largely debt-funded with the issuance of an incremental 95 million term loan B, with a portion of the proceeds being retained by the group to support ongoing operational and liquidity needs. + Despite the strategic benefits of these imminent acquisitions, the group's recent underperformance has significantly hit the deleveraging profile and free operating cash flow (FOCF) generation. The challenges faced in the ongoing business transformation--combined with the periodic M&A activity--present notable pressure on the group's debt protection metrics in our forecasts. + We are therefore revising the outlook on Keter Group to negative from stable and affirming our 'B' long-term issuer credit rating. + The negative outlook reflects our view that any further deviation from our earnings expectations due to declining sales or higher...

Research Update