TriMas Corp.

Our stable outlook reflects TriMas' good market position, relatively steady S&P Global Ratings-adjusted EBITDA margin and consistent cash flow generation, which should enable the company to pursue acquisitions and share repurchases while maintaining adjusted debt to EBITDA below 3x. We could lower the rating over the next 12 months if TriMas pursues larger-than-expected debt-financed acquisitions or if an economic slowdown meaningfully deteriorates TriMas' credit measures. This could happen if, for instance, weakness in its end markets reduces EBITDA margins by more than three or four percentage points while the company pursues acquisitions, resulting in adjusted debt to EBITDA over 3x. We could also lower the rating if liquidity weakens or if headroom under covenants declines below 15%. While unlikely over

...The sale of the Lamons business reduces the company's exposure to highly cyclical energy-related end markets and allows it to further invest in its packaging and aerospace segments. At the end of fourth-quarter 2019, TriMas Corp. completed the sale of its Lamons business for $135 million cash proceeds. The business, which manufactures industrial sealing and fastener solutions used in petrochemical and oil refinery applications, was reported in the specialty products segment. Lamons generated about $186 million in net sales and $21 million of EBITDA for the 12 months ended Sept. 30, 2019. Cash proceeds from the sale will bolster TriMas' healthy balance sheet and allow it to invest in innovation and bolt-on acquisitions, accelerating long-term growth, predominantly in the packaging and aerospace segments....

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