Private equity fund Apollo has entered into an agreement to acquire Netherlands-based lighting solutions provider Lumileds Holdings B.V. from Koninklijke Philips N.V. for an enterprise value of around $1.6 billion. To finance the acquisition, a new holding company Bright Bidco B.V. is planning to borrow $1,150 million in the form of a senior secured cov-lite term loan B and contract a $200 million revolving credit facility (RCF). We are assigning our preliminary 'B+' long-term corporate credit rating to Bright Bidco B.V. (Lumileds) with a stable outlook. The stable outlook reflects our view that Lumileds' separation from Royal Philips will be well managed and that the company's focus on high-margin segments will lead to a debt-to-EBITDA ratio below 5x. On March
