S&P puts AI Sirona on negative watch

S&P said it placed the B ratings for AI Sirona (Luxembourg) Acquisition Sarl, the parent company of Zentiva, on CreditWatch with negative implications.

Zentiva plans to buy Alvogen’s Central and Eastern European business.

The capital structure for the purchase hasn’t been disclosed.

“We understand that the financial sponsor Advent will inject equity to partially fund the deal; however, the majority will be debt-funded. As such, we continue to expect leverage will likely materially exceed our current base case as the transaction might increase the debt burden by about one-third. This has led us to forecast that the group's adjusted debt to EBITDA could fall above 7.5x in the next 12 months. Previously, Zentiva’s ability to maintain adjusted debt to EBITDA between 6.0x and 7.0x on average over the next three years was a core assumption supporting the B rating,” S&P said in a press release.

The company’s €880 million term loan is rated B and its €275 million second-lien term loan is rated CCC+.

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