Moody's gives Biofarma, notes B3

Moody's Investors Service said it gave a B3 corporate family rating and a B3-PD probability of default rating to Kepler SpA (Biofarma) and a B3 instrument rating its new €345 million of guaranteed senior secured floating-rate notes due 2029.

The agency noted the B3 rating is constrained by Biofarma’s small scale with high geographic concentration in Italy where 55% of revenue is derived, and with two customers representing around 22% of revenues. Additionally, Biofarma has high financial leverage with a Moody's-adjusted gross leverage of 6.6x for the last 12 months to March 2022.

However, the rating also reflects Biofarma's leading position in the European contract development and manufacturing organization niche segment of nutraceuticals with a specific expertise inprobiotics and its broad product offering across several dosage forms and good technological capabilities, Moody’s said.

Funds managed by Ardian and Victoria acquired Biofarma for €1.17 billion. The note proceeds and €877.7 million of shareholder funding will fund the deal.

The outlook is stable.

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