Moody's: Epicor-Activant B2, loans Ba3, notes Caa1

Moody's Investors Service said it assigned a B2 corporate family rating to the proposed buyout of Epicor Software Corp. and Activant Solutions Inc.

The agency also said it assigned Ba3 ratings to the new entity's secured debt facilities and Caa1 ratings to its new senior unsecured notes.

The debt will be used to finance the buyout of Epicor and Activant by the private equity firm, Apax Partners. The holding company making the acquisitions, Eagle Parent Co., is expected to change its name to Epicor Software Corp. post closing.

The outlook is stable.

The ratings reflect the high leverage pro forma for the transaction with debt-to-EBITDA at about 7x, Moody's said, as well as the challenges of integrating the two companies.

The ratings also consider an expectation that leverage will steadily improve to 6x or below during 2012 once the initial integration has been implemented and restructuring costs are completed, the agency said.

The rating recognizes the strong market positions the two companies have built in their respective vertical markets and the diversity in the end markets served, Moody's added.

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