Moody's boosts IDEX

Moody's Investors Service said it upgraded IDEX Corp.'s long term rating to Baa2 from Baa3 concluding the agency's review for possible upgrade commenced on Oct. 24.

The agency said that the upgrade reflects IDEX's solid financial performance and growth trends, improved profitability, increasing cash generation and conservative financial policies.

In addition, this rating action takes into consideration that the recently announced, $158 million acquisition of Nova Technologies Corp. will likely be financed with debt, Moody's noted.

The outlook is stable.

The Baa2 rating and stable outlook reflect 1) the high levels of geographic, customer and end-market diversification which fosters mid-single digit organic growth rates and exemplary operating margins despite slowing economic trends in certain North American end-markets which are hampering certain IDEX businesses, 2) IDEX's low leverage and prudent management of its capital structure despite increasing debt-financed acquisitions, 3) the agency's expectation that IDEX will continue acquiring businesses at the heightened levels seen over the past 2 years, likely resulting in a moderate spikes in debt levels, 4) IDEX's solid liquidity and free cash flow generation, coupled with limited shareholder enhancing activities, support ongoing repayment of acquisition related debt and 5) the likelihood that ongoing operational excellence initiatives will continue to yield cost reductions and improved productivity, Moody's said.

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