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S&P: infoUSA remains on watch
Standard & Poor's said its ratings on infoUSA Inc., including the BB corporate credit and senior secured debt ratings, remain on CreditWatch with negative implications.
The ratings were placed on watch on June 14 following an offer to take infoUSA private by Vin Gupta & Co. LLC - an entity controlled by the company's chairman and CEO and holder of about 38% of infoUSA's common shares.
S&P said the CreditWatch listing reflects the potential for a substantial increase in the company's debt levels. Under the terms of the proposed offer, holders of the company's shares not held by Gupta will receive $11.75 per share in cash. The transaction would be debt financed, resulting in incremental debt of about $400 million.
S&P said that pro forma operating lease-adjusted debt to EBITDA would increase to more than 6x, compared with less than 2.5x for the 12 months ended June 2005.
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