S&P puts SPX Flow on watch

S&P said it placed SPX Flow Inc.’s BB issuer rating on CreditWatch with negative implications.

The CreditWatch placement follows SPX Flow's announcement it agreed to be acquired by Lone Star Funds in an all-cash transaction valued at $3.8 billion, including the assumption of debt, the agency said.

“We expected the company to gradually increase leverage to the 2x-3x range through shareholder-friendly behavior and acquisitions. However, given the planned sale to Lone Star, we believe the company could undertake more aggressive financial policies. This could result in higher debt and drive a weaker assessment of overall financial risk, in our view,” S&P said in a press release.

The agency said it aims to resolve the CreditWatch after the capital structure and financial policies of the new owners become clear.

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