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Fitch keeps Express Scripts on negative watch
Fitch Ratings said it maintained the ratings of Express Scripts Inc. on Rating Watch negative following further review of the anticipated acquisition of Medco Health Solutions, Inc.
The ratings on review include its issuer default rating of BBB, senior unsecured bank credit facility rating of BBB and senior unsecured notes rating of BBB.
Fitch said it believes the proposed acquisition is strategically sound, fits within the company's core competencies, offers a portfolio of complimentary ancillary services and provides potential for gains in efficiencies of scale.
The Negative Watch recognizes the expected increase in leverage required to complete the transaction, the agency said. Fitch estimates that the company will require $11 billion to $12 billion of additional debt and pro forma leverage of 2.9 times to 3.1 times to satisfy the cash component of the deal.
Ratings constraints include the slow growth of U.S. prescriptions during the past two years, the agency said.
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