S&P shifts DiversiTech view to stable

S&P said it changed the outlook on DiversiTech Holdings Inc. to stable from negative, citing the company’s better-than-expected earnings and solid margins through the third quarter of 2020.

“Strong organic growth and cost-reduction efforts lowered leverage by two turns to 6.1x over the last 12 months. For the 12 months ended Sept. 30, 2020, adjusted leverage for DiversiTech was 6.1x compared to 8x for the same period last year, driven by strong organic revenue growth and meaningful margin improvement,” S&P said in a press release.

DiversiTech’s stable outlook reflects a slow economic recovery and strength in end markets due to nondiscretionary repair and replacement needs, S&P said.

The agency affirmed DiversiTech’s B issuer rating, B+ rating on the first-lien term loan and CCC+ second-lien term loan rating.

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