S&P rates Picard Midco B

S&P said it assigned a B issuer rating to Picard Midco Inc. Affiliates of Vista Equity Partners Management LLC and Elliott Investment Management LP organized the company under Balboa Intermediate Holdings LLC for their pending acquisition of Citrix Systems Inc. and subsequent merger with Tibco Software Inc.

The agency also raised issuer credit ratings on Balboa and Tibco to B from B-.

Picard Midco, through these holdings, plans on issuing a new $3 billion term loan A due 2028, a $4.05 billion term loan B due 2029, a $500 million euro-denominated term loan B due 2029 and a $1 billion revolving credit facility due 2027 of the $15 billion in debt financing it intends to raise alongside a $2.5 billion preferred equity issuance and rollover equity to fund the transaction. S&P said it also expects the company to issue a $3.5 billion senior secured first-lien note and a $3.95 billion second lien-term loan shortly after.

“We think the motivations of adjoining Citrix with Tibco are primarily financial instead of product- or technology-driven due to our belief there is minimal overlap between the two sets of solutions. Although we think the merger is unlikely to change the market position or competitive advantages structurally previously ascribed to Citrix and TIBCO as stand-alone companies, the economies of scale it will yield leads us to view the business of the combined company as slightly better,” S&P said in a press release.

The outlook is stable.

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