The ratings on Thomasville, Ga.-based Cleaver-Brooks Inc. reflect its "weak" business risk profile and "highly leveraged" financial risk profile. The company operates in a highly fragmented and competitive industry, and Standard&Poor's Ratings Services believes that this competition will remain a business risk. Still, we expect Cleaver-Brooks' profitability to remain good in fiscal 2013, and free operating cash flow should remain positive. This will allow the company some flexibility to maintain credit measures within our expectations for the rating, which include total debt to EBITDA of 5x-6x. The company's ownership by private equity remains a credit risk, in our view, because of private equity's influence on the company's overall financial policy. Primarily based in the U.S., with about 80%
