S&P rates Brand Services loans B, CCC+

Standard & Poor's said it affirmed its B corporate credit rating on Brand Services Inc. following the company's recently announced intention to acquire Canadian scaffolding services and concrete construction services provider Aluma Enterprises Inc. for about $208 million.

S&P also assigned its B senior secured rating and 2 recovery rating to Brand's $150 million supplemental term loan and its CCC+ senior secured rating and 5 recovery rating to Brand's $35 million second-lien term loan.

The outlook is negative.

The term loan issuances, along with a $30 million issuance of preferred stock and existing cash on hand, will be used to fund the Aluma acquisition.

S&P said the ratings reflect concerns associated with the relatively large, predominantly debt-financed acquisition, which includes a business area outside of Brand's core competency. Ratings are further restricted by the company's narrow scope of operations, some customer concentration, and a new senior management team.

These weaknesses are only partially offset by Brand's long-term customer relationships and large market share in North American scaffolding services, the agency said.

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