Research Update: Odyssey Logistics And Technology Corp. Ratings Affirmed On Acquisition Of AFF Global Logistics, Outlook Remains Stable

Odyssey Logistics and Technology Corp. has agreed to acquire AFF Global Logistics, a provider of freight forwarding services. The company plans to finance the acquisition with an incremental $257 million add-on to its first-lien term loan, a $70 million incremental second-lien term loan, and rollover equity from its private-equity owner The Jordan Co. We are affirming our 'B' issuer credit rating on Odyssey. At the same time, we are affirming our 'B+' issue-level rating on the company's first-lien credit facility and our 'CCC+' issue-level rating on its second-lien term loan. The stable outlook reflects our belief that Odyssey's credit metrics will improve pro forma for the acquisition. We expect the transaction to close around the end of 2018. Therefore, the

...+ Odyssey Logistics and Technology Corp. has agreed to acquire AFF Global Logistics, a provider of freight forwarding services. + The company plans to finance the acquisition with an incremental $257 million add-on to its first-lien term loan, a $70 million incremental second-lien term loan, and rollover equity from its private-equity owner The Jordan Co. + We are affirming our 'B' issuer credit rating on Odyssey. + At the same time, we are affirming our 'B+' issue-level rating on the company's first-lien credit facility and our '###+' issue-level rating on its second-lien term loan. + The stable outlook reflects our belief that Odyssey's credit metrics will improve pro forma for the acquisition. We expect the transaction to close around the end of 2018. Therefore, the company's 2018 credit metrics will appear weaker because of the inclusion of the debt to fund the acquisition while its earnings and cash flow remain unaffected. However, we forecast that its debt to EBITDA will improve to...

Research Update