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Moody's assigns B2 to All3Media, loans
Moody's Ratings said it assigned a first-time B2 corporate family rating and B2-PD probability of default rating to Gold Rush Bidco Ltd., the top entity of the restricted group that will be acquiring DLG Acquisitions Ltd., the holding company for All3Media. Moody's also assigned B2 ratings to the backed senior secured €500 million term loan B due 2031 and the backed senior secured £45 million undrawn revolving credit facility due 2030. The outlook is positive.
The deal will be 34% debt-funded while the shareholders are injecting £675 million of common equity or 66% of net total capitalization. This implies that the starting Moody's adjusted gross leverage of 5.3x for the full year 2023 on a pro forma basis will be lower than DLG Acquisition's leverage of 5.8x at the end of 2023, before this transaction, the agency noted.
Moody’s noted Gold Rush’s well-diversified portfolio of programs, the value of its intellectual property, its history of consistent top-line growth and supportive new owners and experienced management team.
However, limiting the ratings are All3Media’s modest scale, the geographic concentration of its revenue, the challenges of refreshing content while keeping creative talent and lower EBITDA margin versus some competitors, the agency said.
The positive outlook captures the view that All3Media could “continue to perform largely in line with its medium-term business plan and execute future add-on acquisitions and related contingent consideration payments in a way that its Moody's adjusted gross leverage reduces to visibly below 5x with free cash flow generation turning positive and improving on a sustainable basis by 2025,” the agency said.
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