SRS Distribution Inc. 'B' Rating Affirmed On Acquisition By Leonard Green Partners, Outlook Negative; Debt Rated

Leonard Green&Partners L.P. has signed a definitive agreement to acquire a majority stake in SRS Distribution Inc. in partnership with management and Berkshire Partners (now with a reduced stake) for $3.6 billion, raising leverage to 7x pro forma for the transaction. The transaction will be partially financed with a new capital structure (in the name of Shingle Acquisition Merger Sub, Inc. initially and then in the name of SRS Distribution Inc. following the consummation of the merger) consisting of a $400 million asset-based lending (ABL) facility (unfunded at close), a $1.3 billion first-lien term loan, and $380 million in senior unsecured notes; equity contributions by Leonard Green, Berkshire, and management will finance the remainder of the transaction. We

...+ Leonard Green & Partners L.P. has signed a definitive agreement to acquire a majority stake in SRS Distribution Inc. in partnership with management and Berkshire Partners (now with a reduced stake) for $3.6 billion, raising leverage to 7x pro forma for the transaction. + The transaction will be partially financed with a new capital structure (in the name of Shingle Acquisition Merger Sub, Inc. initially and then in the name of SRS Distribution Inc. following the consummation of the merger) consisting of a $400 million asset-based lending (ABL) facility (unfunded at close), a $1.3 billion first-lien term loan, and $380 million in senior unsecured notes; equity contributions by Leonard Green, Berkshire, and management will finance the remainder of the transaction. + We are affirming our 'B' corporate credit rating on SRS and assigning our 'B' and '###+' issue-level ratings to the company's first-lien term loan and senior unsecured notes, respectively. + The negative outlook reflects the...

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