Moody’s revises Anixter to negative

Moody's Investors Service said it affirmed the Ba2 corporate family rating of Anixter Inc. following the announcement by Anixter International Inc., Anixter Inc.'s parent holding company, that it is acquiring Tri-Ed for about $420 million excluding fees and expenses.

The purchase price represents about 11.6 times multiple of Tri-Ed's adjusted EBITDA. Tri-Ed, with sales approximating $570 million and adjusted EBITDA of about $36 million, is a North American distributor of security and low-voltage technology products.

In actions, the agency assigned a speculative grade liquidity rating of SGL-3 and changed the outlook to negative from stable.

Moody’s said the outlook change results from the increased credit risk as Anixter is pursuing an aggressive strategy by using its liquidity to partially fund the acquisition. Anixter is using a separate $200 million term loan allowed under the existing revolving credit facility due 2018, in addition to further facility drawdowns to fund the acquisition.

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