Moody's affirms Hill-Rom

Moody's Investors Service said it affirmed Hill-Rom Holdings, Inc.'s Baa3 senior unsecured rating following its plans to acquire Liko for about $183 million.

The outlook remains negative.

The affirmation reflects expectation that the company will generate sufficient free cash flow over the next 12 months to enable rapid repayment of any borrowing associated with the deal, according to the agency.

"While acquisition activity was anticipated, Hill-Rom must continue to focus on achieving targeted organic growth rates and maintaining a prudent balance sheet," Diana Lee, a senior credit officer at Moody's, said in a written statement.

The Baa3 rating considers Hill-Rom's relatively small revenue base, lack of diversification and potential for additional acquisition activity, offset by a favorable market position in its acute care bed business and relatively conservative posture toward leverage in the past, the agency said.

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