Research Update: SIG Combibloc Group AG Ratings Affirmed At 'BBB-' On Scholle IPN Acquisition Announcement; Outlook Stable

Switzerland-domiciled aseptic carton packaging manufacturer SIG Combibloc Group AG (SIG) has announced that it is acquiring U.S.-based Scholle IPN for an enterprise value of about €1.36 billion. Although the acquisition strengthens SIG's scale and diversity, we expect a temporary spike in leverage, with S&P Global Ratings-adjusted debt to EBITDA of 3.8x and funds from operations (FFO) to debt of 21% for fiscal year (FY) ending Dec. 31, 2022. However, we expect deleveraging from FY2023, and that leverage will remain in line with our expectations. We affirmed our 'BBB-' long-term issuer credit rating on SIG and SIG Combibloc PurchaseCo S.a.r.l. We also affirmed our 'BBB-' issue rating on the company's senior unsecured debt, in line with our issuer credit rating. The

... manufacturer SIG Combibloc Group AG (SIG) has announced that it is acquiring U.S.-based Scholle IPN for an enterprise value of about 1.36 billion. - Although the acquisition strengthens SIG's scale and diversity, we expect a temporary spike in leverage, with S&P Global Ratings-adjusted debt to EBITDA of 3.8x and funds from operations (FFO) to debt of 21% for fiscal year (FY) ending Dec. 31, 2022. However, we expect deleveraging from FY2023, and that leverage will remain in line with our expectations. - We affirmed our '###-' long-term issuer credit rating on SIG and SIG Combibloc PurchaseCo S.a.r.l. We also affirmed our '###-' issue rating on the company's senior unsecured debt, in line with our issuer credit rating. - The stable outlook reflects our expectations that leverage will improve over the next 12 months with debt to EBITDA of less than 3.5x and FFO to debt of more than 25% in FY2023....

Research Update