Moody's assigns Sharp B3, loans B2

Moody's Investors Service said it gave a B3 corporate family rating and a B3-PD probability of default rating to Sharp Midco LLC, ahead of the planned carve-out from Nenelite Ltd. (UDG Huntsworth). Moody's also assigned a B2 rating to Sharp's planned first-lien senior secured credit facilities, consisting of a $465.5 million term loan due 2028 and a $90 million revolver expiring in 2026.

Sharp is UDG Huntsworth’s commercial packaging and clinical trial manufacturing business. Clayton Dubilier & Rice, which owns UDG Huntsworth, is carving Sharp out and will keep its ownership.

“The assignment of B3 CFR reflects Moody's view that Sharp's pro forma debt-to-EBITDA financial leverage will be very high at approximately 7.5x (for the LTM period ended Sept. 30, 2021) at the close of the transaction. However, Moody's expects the company's high proportion of recurring revenue and favorable industry tailwinds will support mid to high-single digit organic revenue growth and deleveraging toward 6.5x, over the next 12-18 months,” the agency said in a press release.

The outlook is stable.

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