S&P: School Specialty on watch

Standard & Poor's said it placed its ratings on School Specialty Inc. on CreditWatch with negative implications, including its BB corporate credit ratings and B+ subordinated debt.

This action follows the company's announcement that it signed a definitive agreement to be acquired by an affiliate of Bain Capital Partners LLC for $1.5 billion, the agency said.

Because the transaction is likely to result in a significant increase in debt leverage and a drop in cash-flow protection, the company's credit strength is expected to deteriorate, S&P said.

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