Moody's gives DS Parent, loans B2

Moody's Investors Service said it gave first-time ratings to DS Parent, Inc. (Davis-Standard), including a B2 corporate family rating and a B2-PD probability of default rating. Concurrently, Moody's assigned a B2 rating to the company's planned $340 million senior secured credit facility comprised of a $55 million revolver and a $285 million term loan.

“The B2 CFR reflects the company's modest scale and elevated financial leverage with pro forma Moody's adjusted debt-to-EBITDA of about 5.25x. The rating also reflects Davis-Standard's mixed track record of operating performance. The company experienced top-line pressures and earnings declines between 2017 and 2020 due to lower infrastructure-related sales and internal restructuring, although recent operating performance has been much improved,” Moody’s said in a press release.

Term loan proceeds and sponsor equity will be used to fund the acquisition of Davis-Standard by Gamut Capital Management.

The outlook is stable, reflecting a healthy backlog, a forecast of modest earnings growth and positive free cash flow, Moody’s said.

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