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Moody's affirms Entegris on merger news
Moody's Investors Service said it affirmed the ratings of Entegris Inc., including the Ba1 corporate family rating and Baa3 senior secured ratings following news that the merger between Entegris and Versum Materials, Inc.
The outlook is stable.
Entegris and Versum have agreed to merge with the Entegris name remaining and the Entegris senior management continuing, Moody's said.
Entegris's shareholders will own the majority of the combined company with Versum shareholders owning the remaining 47.5%, the agency said.
The proposed merger is clearly a credit positive development since it will greatly expand Entegris's scale with revenues of about $3 billion, Moody's said.
Pro forma leverage is modest at less than 2.4x and the agency said it expects that this will decline toward 2x as operating synergies of the combined company are captured.
Still, the integration of these two companies will entail near-term risk, such as the sales force integration, as well as longer term risks related to setting priorities for research and development, the agency said.
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