Moody's rates Autodis notes B3

Moody's Investors Service said it assigned a B2 corporate family rating and a B1-PD probability of default rating to Parts Holdings (France) SAS, a holding company of the Autodistribution group. Concurrently, Moody's assigned a B3 rating to the €240 million of fixed-rate senior secured notes due 2019 issued by Autodis SA. The outlook is stable.

The agency said the B2 corporate family rating reflects Autodistribution's exposure to the economy of France, representing about 90% of sales for the 12 months ended in October; the company's modest size compared to some of its suppliers, potentially limiting its bargaining power; intense competition in the sector leading to price pressure; high leverage pro forma for the acquisition of ACR Holdings SAS; the sensitivity of the automotive aftermarket to macroeconomic conditions and oil prices and risks relating to potential merger and acquisition activity.

Positively, Moody's said the ratings are supported by an established presence in the fragmented aftermarket, which is characterized by higher customer loyalty and less cyclicality compared to the automotive sector; the company's relative size compared to other independent players, manifesting itself in a dense distribution network and leading to economies of scale; a fragmented customer base consisting of local distributors and garages; and Autodistribution's track record showing improving operational performance in the most recent years.

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