Moody’s: Physio-Control view negative

Moody's Investors Service said it confirmed Physio-Control International, Inc.'s B2 corporate family rating, B2-PD probability of default rating and first- and second-lien bank debt at B1 and Caa1, respectively.

The agency also assigned a negative outlook.

The negative outlook is driven by the increased financial leverage Physio-Control will incur as it plans to acquire HeartSine Technologies Inc., an Ireland-based manufacturer of Automatic External Defibrillators (AEDs), which it plans to largely fund using $63 million of incremental bank debt.

"Although this deal will complement Physio-Control's existing AED product-line, the incremental leverage is credit negative and comes on the heels of a dividend recapitalization in May," Moody's assistant vice president Daniel Goncalves said in a news release.

Moody's estimates leverage will increase to 6.7 times from 6.1 times pro forma for the acquisition.

"We expect that new products will continue to drive revenue growth in a relatively mature external defibrillator market, while recurring revenue from services and accessories provides earnings stability," Goncalves added in the release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.