Switzerland-based vending services operator Selecta Group B.V. has announced its intention to acquire Pelican Rouge Group B.V. for about €555 million. We anticipate that the acquisition will have a slightly positive impact on Selecta's credit metrics, despite the company's financial profile remaining highly leveraged. If completed, the acquisition will double the size of Selecta's machine portfolio in largely complimentary geographies and add vertical integration in the company's coffee business. As a result, we are affirming our 'B' long-term corporate credit rating on Selecta. The negative outlook reflects the risk that we could downgrade Selecta by one notch if the transaction unexpectedly does not close or the company underperforms against our base case given the material execution risk associated with integrating
