French testing, inspection, and certification (TIC) company Soco 1 (Socotec) plans to acquire engineering and construction firm Vidaris, which will enhance Socotec's scale, geographic diversity, and long-term growth. Socotec will fund the deal by issuing a €263 million add-on to its existing senior secured first-lien term loan, along with €161 million equity injection The additional debt in our view further weakens Soco 1's credit metrics. We are assigning our 'B' issuer credit rating to Soco 1 and our 'B' issue rating and '4' recovery rating to the company's existing senior secured debt facilities and the add-on. The outlook is negative because, despite the improved scale and geographic diversity, Socotec will generate only limited free operating cash flow (FOCF) in 2019
