Research Update: Securitas AB Downgraded To 'BBB-' On Debt-Funded Acquisition ; Outlook Stable

Swedish security provider Securitas AB has completed the acquisition of security solutions business STANLEY Security (Stanley) from STANLEY Black and Decker. Securitas funded the acquisition with bridge facilities, which we expect it will refinance with a mix of debt and equity in the short term. The additional debt for this transaction will increase S&P Global Ratings-adjusted leverage to about 4.1x in 2022 on a pro-forma basis for the full year of the acquisition before improving toward 3.5x in the coming years. Similarly, funds from operations (FFO) to debt will fall below 20% in 2022 but we expect this to improve to above 20% from 2023. We therefore lowered our issuer credit rating on Securitas and our issue-level rating on its

...- Swedish security provider Securitas AB has completed the acquisition of security solutions business STANLEY Security (Stanley) from STANLEY Black and Decker. Securitas funded the acquisition with bridge facilities, which we expect it will refinance with a mix of debt and equity in the short term. - The additional debt for this transaction will increase S&P Global Ratings-adjusted leverage to about 4.1x in 2022 on a pro-forma basis for the full year of the acquisition before improving toward 3.5x in the coming years. Similarly, funds from operations (FFO) to debt will fall below 20% in 2022 but we expect this to improve to above 20% from 2023. - We therefore lowered our issuer credit rating on Securitas and our issue-level rating on its senior unsecured debt to '###-' from '###'. We lowered the short-term rating to 'A-3' from 'A-2' with the Nordic rating revised downward to 'K-3' from 'K-2'. - The ratings were removed from CreditWatch with negative implications, where they were placed...

Research Update