Madison IAQ LLC (dba Madison Air) recently announced its intention to acquire a North American based provider of humidification, dehumidification and indoor air quality products for $2.6 billion, inclusive of deferred payments. Madison Air intends to fund the acquisition with a new $1.75 billion first-lien term loan, an equity contribution from its parent, Madison Industries Holdings LLC, and from cash on hand. Given the planned debt issuance and the target?s anticipated EBITDA contribution, we forecast Madison Air?s S&P Global Ratings-adjusted leverage on a pro forma basis to increase slightly above our downside threshold of 7x in 2025, from the high-5x area at the end of 2024. That said, we forecast the company will deleverage toward 6x through 2026 driven by
