Moody’s assigns Sound United, loan B2

Moody’s Investors Service said it assigned ratings to DEI Sales, Inc. (Sound United), including a B2 corporate family rating and a B2-PD probability of default rating. Concurrently, Moody’s assigned a B2 rating to the company’s proposed $380 million senior secured first-lien term loan due 2028.

“Sound United’s B2 CFR broadly reflects its high financial leverage with debt/EBITDA expected at around 3.9x for fiscal year-end March 31, 2021 (ratios are Moody’s adjusted, otherwise stated), pro forma for the proposed transaction and the recent Bowers & Wilkins (B&W) acquisition. Sound United’s core products are discretionary with exposure to cyclical consumer spending and changes in consumer preferences and technology trends,” the agency said in a press release.

After paying fees and expenses, term loan proceeds are expected to be used to refinance about $322.3 million of debt and pay a $52 million dividend distribution to shareholders. Concurrent with the transaction, the company will also enter into a new unrated $75 million asset-based lending revolving facility due 2026 expected to be undrawn at close.

The outlook is stable.

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