Moody’s assigns LogMeIn B2, loans B1, Caa1

Moody’s Investors Service said it assigned a B2 corporate family rating to LogMeIn, Inc. and B1 and Caa1 ratings to its proposed $2.2 billion of first-lien and $500 million of second-lien credit facilities, respectively.

The proceeds along with the proceeds from added debt that will be pari passu with the first-lien credit facilities and about $1.4 billion of equity to be contributed by affiliates of Francisco Partners and Evergreen Coast Capital Corp. will be used to acquire LogMeIn for about $4.3 billion. The acquisition is expected to close in the third quarter of 2020.

“The B2 CFR is constrained by LogMeIn’s high closing leverage and a large (albeit declining) proportion of revenues from mature products. LogMeIn’s growth-oriented portfolio comprising its GoToConnect Unified Communications as Service (UCaaS), LastPass and Bold360 Digital Engagement offerings accounted for about 30% of its revenues in 1Q 2020. These products address large and growing markets but also face formidable competitors,” Moody’s said in a press release.

The outlook is stable.

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