Moody's eyes Entegris for downgrade

Moody's Investors Service said it placed Entegris Inc.'s ratings, including the Baa3 Senior secured bank credit facility ratings, and the Ba2 senior unsecured notes ratings, on review for downgrade. The speculative grade liquidity rating of SGL-1 remains unchanged.

This action follows the announcement Entegris plans to acquire CMC Materials, Inc. in a cash and stock transaction for about $5.8 billion, excluding fees.

“The expected $3.9 billion cash portion will be funded with a combination of balance sheet cash and new debt. Entegris has committed debt financing. Entegris has not announced a strategy regarding its existing debt nor plans for the debt at CMC post-acquisition,” Moody’s said in a press release.

The review will focus on the strategic rationale, details of the integration plan and any cost synergies, deleveraging plans, any conditions required for regulatory approval and details on the mix and terms of the new debt, Moody’s said.

Based on the information currently available, the agency said if it downgrades any ratings, it would probably be limited to a notch.

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