Research Update: Specialty Chemical Distributor Azelis Group NV Assigned 'BB+' Rating; Outlook Stable

Belgium-based Azelis is the No. 2 global specialty chemicals distributor in terms of sales, with revenue of €4.1 billion and S&P Global Ratings-adjusted EBITDA €472 million in 2022. The company is considering raising €400 million in new debt, the proceeds of which we expect will be used to refinance recently signed and closed acquisitions, repay its revolving credit facility (RCF), and support further inorganic investments. In our base case, we factor in potential moderating market conditions in 2023 and a still-active acquisition strategy, supported by continued very strong cash flow conversion, translating into debt to EBITDA of about 3.6x-3.7x in 2023 and sound deleveraging thereafter. We therefore assigned our 'BB+' long-term issuer credit rating to Azelis Group NV. The stable

...- Belgium-based Azelis is the No. 2 global specialty chemicals distributor in terms of sales, with revenue of 4.1 billion and S&P Global Ratings-adjusted EBITDA 472 million in 2022. - The company is considering raising 400 million in new debt, the proceeds of which we expect will be used to refinance recently signed and closed acquisitions, repay its revolving credit facility (RCF), and support further inorganic investments. - In our base case, we factor in potential moderating market conditions in 2023 and a still-active acquisition strategy, supported by continued very strong cash flow conversion, translating into debt to EBITDA of about 3.6x-3.7x in 2023 and sound deleveraging thereafter. - We therefore assigned our '##+' long-term issuer credit rating to Azelis Group NV. - The stable outlook reflects our view that Azelis will maintain an S&P Global Ratings-adjusted gross debt to EBITDA of 3.0x-4.0x in 2023-2024, while generating healthy free operating cash flows (FOCF)....

Research Update