Research Update: Solina Group Holding 'B' Ratings Affirmed On Improved Business Standing Following Saratoga Acquisition; Outlook Stable

Food ingredients manufacturer Solina Group Holding (Solina) acquired U.S. ingredients company Saratoga for a total consideration of €590 million. The transaction was funded with a mix of debt and a significant equity contribution from private-equity sponsor Astorg. In 2023, we forecast Solina's adjusted EBITDA will increase to about €180 million-€190 million, adjusted debt to EBTIDA will reduce to 6.0x-6.5x, and funds from operations (FFO) cash interest will sit at about 2.5x, while the group generates positive free operating cash flow of about €35 million-€45 million. The acquisition strengthens our assessment of Solina's business risk profile, because it enhances the group's scale and geographical diversity, by adding a large production and client base in the wide and growing U.S. seasoning market,

...- Food ingredients manufacturer Solina Group Holding (Solina) acquired U.S. ingredients company Saratoga for a total consideration of 590 million. The transaction was funded with a mix of debt and a significant equity contribution from private-equity sponsor Astorg. - In 2023, we forecast Solina's adjusted EBITDA will increase to about 180 million-190 million, adjusted debt to EBTIDA will reduce to 6.0x-6.5x, and funds from operations (FFO) cash interest will sit at about 2.5x, while the group generates positive free operating cash flow of about 35 million-45 million. - The acquisition strengthens our assessment of Solina's business risk profile, because it enhances the group's scale and geographical diversity, by adding a large production and client base in the wide and growing U.S. seasoning market, while being margin neutral. We also see limited integration risks. - We therefore affirmed our 'B' long-term issuer credit rating on Solina and the 'B' issue rating on the 685 million senior...

Research Update