S&P moves Camelot UK view to positive

S&P said it changed its outlook for Camelot UK Holdco Ltd. (Clarivate) to positive from stable and affirmed all its ratings, including its B issuer rating.

The agency said it decided to revise the leverage upgrade trigger to 6x from 5.5x to reflect Clarivate’s subscription and recurring revenue base compared to its ratings peers.

“We forecast Clarivate's leverage will decline to the mid-5x area in 2023 from the high-7x area in 2022 due to the nearing maturity of its debt-like convertible preferred shares and its improving EBITDA generation. After the completion of the ProQuest acquisition in December 2021, the company's pro forma revenue base and EBTIDA generation have improved substantially,” S&P said in a press release.

The improved outlook reflects the forecast that Clarivate will integrate its recent acquisitions, organically increase its revenue in the mid-single digit range and deliver free operating cash flow such that S&P Global Ratings-adjusted leverage will decrease below 6x by the second half of 2023.

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