S&P shifts Zywave view to negative

S&P said it revised its outlook for Zywave Inc. (Cardinal Parent Inc.) to negative from stable and affirmed its B- issuer rating.

“Over the past 24 months, the company has closed on five acquisitions and made sizable investments in its sales and product capabilities, substantially increasing operating expenses in the process. As a result, profitability metrics have deteriorated sharply, with adjusted EBITDA margins falling to 10% from 38% and FOCF decreasing to negative $30 million from negative $2 million,” the agency said in a press release.

The weaker outlook reflects the position that the challenging near-term operating environment coupled with rising interest rates may cause the company's already declining free cash flow and EBITDA margins to erode further, S&P said.

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