S&P rates Armor Iimak, loan B+

S&P said it gave preliminary B+ ratings to EN6 SAS (Armor Iimak) and its €450 million senior secured term loan maturing in 2029. The recovery rating on the term loan is 3, indicating an expectation of meaningful recovery (rounded estimate: 50%) in default. Armor Iimak also plans to secure a €85 million senior secured revolving credit facility due 2028.

“The group has a leading market share of 40% in the global thermal transfer ribbon market and operations in Europe, America, and Asia-Pacific. Armor Group acquired International Imaging Materials Inc. (Iimak) in 2021, a move that we expect will strengthen the group's positioning in North America. In our view, Armor Iimak benefits from its exposure to diversified and fairly resilient end-markets, such as food and beverage (30% of 2020 revenue), pharmaceutical and health care (13%), logistics (7%) and textiles (5%),” S&P said in a press release.

After the loan is used to refinance debt and partly finance the acquisition of Armor Iimak by Astorg, S&P said it expects its adjusted debt to EBITDA will be 5.5x-6x at end-2022. Astorg Partners is a buying a 40% stake in the issuer.

“We forecast that adjusted leverage will decline to about 5x-5.5x by end-2023, based on EBITDA growth and the realization of synergies. In addition, we expect funds from operations (FFO) to debt to be about 11% in 2022, improving to 11%-12% next year,” the agency said.

The outlook is stable.

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