Research Update: LABL Inc. Downgraded To 'B-' On Acquisition By CD&R And Merger With Fort Dearborn, Outlook Stable; New Debt Rated

Clayton, Dubilier&Rice (CD&R) has agreed to acquire LABL Inc. (doing business as Multi-Color Corp.) from Platinum Equity and Fort Dearborn Holding Co. Inc. from Advent International and intends to combine the companies to create the world's largest label solutions provider. We expect the proposed transactions to close concurrently in the fourth quarter of 2021. We lowered our issuer credit rating on LABL to 'B-' from 'B'. At the same time, we assigned our 'B-' issue-level rating and '3' recovery rating to the company's new revolving credit facility and first-lien term loans. The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. The stable outlook reflects our expectation

...- Clayton, Dubilier & Rice (CD&R) has agreed to acquire LABL Inc. (doing business as Multi-Color Corp.) from Platinum Equity and Fort Dearborn Holding Co. Inc. from Advent International and intends to combine the companies to create the world's largest label solutions provider. We expect the proposed transactions to close concurrently in the fourth quarter of 2021. - We lowered our issuer credit rating on LABL to 'B-' from 'B'. - At the same time, we assigned our 'B-' issue-level rating and '3' recovery rating to the company's new revolving credit facility and first-lien term loans. The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. - The stable outlook reflects our expectation that S&P Global Ratings-adjusted debt to EBITDA will improve toward 7.5x over the next 12 months. Although we expect improved operating efficiency and significant cost savings from previously implemented initiatives and combination...

Research Update