S&P: DPx Holdings unchanged after add-on

Standard & Poor’s said the ratings on DPx Holdings BV, including its B corporate credit rating, are not affected by news that the company will issue an incremental $250 million first-lien term loan add-on to fund the acquisition of Gallus BioPharmaceuticals.

The rating on the term loan remains at B with a 3 recovery rating, which indicates 50% to 70% expected default recovery.

The additional debt increases leverage to about 7.3x from around 6.7x, S&P said. The acquisition is consistent with an expectation that DPx will continue to be aggressive in pursuing consolidation opportunities in this space, the agency said.

While the addition of Gallus improves DPx’s scale in the fast-growing biologics segment, business risk remains and is characterized by the company’s narrow business focus and highly acquisitive growth strategy, S&P said.

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