Moody's assigns B3 to Barracuda

Moody's Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating to Barracuda Parent, LLC and a B2 rating on its first-lien debt and Caa2 rating on its second-lien debt.

KKR will use the loans to finance its acquisition of the company from Thoma Bravo. Upon closing and repayment of debt, all of Barracuda Networks Inc. ratings from Thoma Bravo’s ownership with be withdrawn. The outlook is stable.

“Barracuda's B3 CFR is driven by the company's very high leverage at close of the KKR acquisition, offset by its strong niche position in the cyber security industry for mid-sized companies. Pro forma debt to EBITDA excluding transaction, restructuring and stock based compensation expenses was over 9x based on October 2021 LTM results but over 11x including those items,” Moody’s said in a press release.

The outlook reflects a forecast of mid- to high-single digit growth in revenues and EBITDA with debt to pro forma EBITDA trending towards 7.5x, the agency said.

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