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Fitch rates Express Scripts BBB
Fitch Ratings said it assigned a BBB issuer default rating to Express Scripts Holdings and affirmed the BBB issuer default ratings of subsidiaries Express Scripts, Inc. and Medco Health Solutions.
The outlook is negative. The ratings were removed from negative watch.
The actions follow the company's completion of its $29.1 billion (40% cash/60% stock) acquisition of Medco Health Solutions, Inc., according to the agency.
The 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, Fitch said.
The company has established a history of leveraging acquisitions, followed by successful integration and rapid deleveraging through debt pay downs with its solid free cash flow generation, Fitch noted.
The outlook recognizes the increase in leverage that was needed to complete the transaction, the agency said.
The company (post acquisition) operates with pro forma leverage, of total debt to EBITDA, of 2.9 times to 3.1x, Fitch said.
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