S&P rates Inetum, loan B

S&P said it preliminarily assigned B ratings to Granite France Bidco SAS (Inetum) and its term loan B. The company plans to borrow €1.133 billion in a combination of term loan A, and term loan B and other senior secured debt, a super senior revolving facility of €200 million (undrawn at closing) and a shareholder loan.

Bain Capital plans to use the term loans to buy the company.

“Inetum benefits from top four market positions, but its profitability margin is lower than peers. Our preliminary B rating reflects Inetum's top four market positions in a diversified geographical and vertical mix, favorable market trends, longstanding customer relationships with 94% renewal rates, and a track record of solid organic and inorganic revenue growth.

These strengths are partly offset by Inetum's low profitability margin, comparatively small share of proprietary software and digital revenue, highly fragmented and competitive operating markets, where Inetum is a relatively small player, and its high leverage,” S&P said in a press release.

After the deal closes, the company’s leverage will be about 7x before retreating to 6.5x-6.7x in 2023, S&P said.

The outlook is stable.

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