Fitch Affirms JohnsonDiversey's IDR at 'B-'; Outlook Revised to Positive.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings has affirmed JohnsonDiversey, Inc.'s (JohnsonDiversey) existing ratings as follows: --Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) at 'B-'; --Senior secured bank credit facilities at 'BB-/RR1'; --Senior subordinated notes at 'B-/RR4'. In addition, Fitch also has affirmed JohnsonDiversey Holdings Inc.'s as follows: --IDR at 'B-'; --Senior discount notes at 'CCC/RR6'. Upon completion of the transactions, Fitch would anticipate the following rating changes: --Assigning a rating of 'B-/RR4' to JohnsonDiversey's new $400 million senior unsecured notes; --Affirming the amended and extended senior secured bank credit facility rating at 'BB-/RR1'; --Assigning an IDR of 'B-' to JohnsonDiversey Holdings II B.V., a co-borrower under the senior secured bank credit facilities; --Withdrawing the ratings for the senior subordinated notes, the IDR at JohnsonDiversey Holdings Inc., and the rating on the senior discount notes. The Rating Outlook for JohnsonDiversey, JohnsonDiversey Holdings II B.V. and JohnsonDiversey Holdings, Inc. is revised to Positive from Negative. In addition, the Positive Outlook will be maintained upon closing of the transaction. The ratings reflect the company's leading positions in the global institutional and industrial cleaning markets, its improving profitability and ability to generate cash flow as well as a relatively stable operating performance during the global economic downturn. The rating is balanced by high debt level relative to cash flows. The Outlook is revised to Positive, based on the positive implications of the announced $477 million equity investment by a Clayton, Dubilier & Rice (CD&R) managed fund in JohnsonDiversey and the recapitalization, which includes debt financing of approximately $1.7 billion, on JohnsonDiversey's capital structure and liquidity. The transaction removes the uncertainties related to the Unilever 'put' option from the capital structure of the company. It also improves the company's liquidity, which, post-closing, will be comprised of an undrawn $250 million revolving credit facility, upsized from the current $175 million revolver, and $129 million cash on hand as of Oct. 2, 2009. Post closing, the resulting maturity profile will be extended with no major debt coming due before 2014 with the anticipated maturity of the company's amended and extended revolving credit facility. The $1 billion term loan will mature in 2015, while JohnsonDiversey's new senior unsecured notes and JohnsonDiversey Holdings Inc.'s PIK PIK See: Payment-in-kind bond PIK See payment-in-kind security (PIK). notes will expire in 2019 and 2020, respectively. Before the recapitalization, all of the company's $1.5 billion was due on or before 2013. Post closing, Fitch expects that benefits from the past restructurings will continue to support profitability and cash flows. Sustainable margin improvements and free cash flow generation used to reduce debt would be catalysts for a ratings upgrade. JohnsonDiversey is a global player in the industrial and institutional (I&I) cleaning market and sells its products into the following product segments: floor care, foodservice, food processing, restroom/housekeeping, laundry and industrial. JohnsonDiversey is currently a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of JohnsonDiversey Holdings, which is currently owned by Commercial Markets Holdco (67%) and Unilever (33%). JohnsonDiversey had approximately $3.1 billion in net sales and Fitch calculated operating EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of approximately $342 million for the last 12 months ending Oct. 3, 2009. The company also announced that it will change its name to 'Diversey, Inc' upon closing of the transaction. Additional information is available at 'www.fitchratings.com'. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP HTTP in full HyperText Transfer Protocol Standard application-level protocol used for exchanging files on the World Wide Web. HTTP runs on top of the TCP/IP protocol. ://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. |
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