Research Update: Merlin Acquisition Corp. 'B-' Rating Affirmed On Acquisition Of Frontmatec; Outlook Stable; New Debt Rated 'B-'

On May 24, 2022, Merlin Acquisition Corp. entered into a definitive agreement to acquire Denmark-based Frontmatec Group ApS. Merlin intends to fund the acquisition with a $200 million incremental first-lien term loan along with an equity contribution from its sponsor, KKR&Co. As a result, we affirmed our 'B-' issuer credit rating on Merlin. The outlook is stable. We assigned our 'B-' issue-level rating and '3' recovery rating to the company's proposed $200 million incremental term loan. We also affirmed our 'B-' issue-level rating and '3' recovery rating on its first-lien debt facilities as well as our 'CCC' issue-level rating and '6' recovery rating on its second-lien term loan. The stable outlook reflects our view that Merlin will generate

...- On May 24, 2022, Merlin Acquisition Corp. entered into a definitive agreement to acquire Denmark-based Frontmatec Group ApS. Merlin intends to fund the acquisition with a $200 million incremental first-lien term loan along with an equity contribution from its sponsor, KKR & Co. - As a result, we affirmed our 'B-' issuer credit rating on Merlin. The outlook is stable. - We assigned our 'B-' issue-level rating and '3' recovery rating to the company's proposed $200 million incremental term loan. We also affirmed our 'B-' issue-level rating and '3' recovery rating on its first-lien debt facilities as well as our '###' issue-level rating and '6' recovery rating on its second-lien term loan. - The stable outlook reflects our view that Merlin will generate positive free operating cash flow (FOCF) and maintain leverage in the high-7x to low-8x range over the next 12 months....

Research Update