Moody’s might upgrade Univar

Moody's Investors Service said it placed the ratings for Univar Inc. on review for upgrade.

The corporate family rating is B1 and the probability of default rating is B1-PD.

The agency said the action follows the announcement that Univar intends to acquire Nexeo in a stock and cash transaction valued at roughly $2 billion.

The company expects to fund the acquisition with a mix of equity and debt and has commitment financing in place of $1.3 billion.

“Moody's recognizes the transaction is a moderately leveraging event initially for Univar, but the review for upgrade reflects the positive attributes of the transaction, including the good strategic fit between the two companies, the significant use of equity to finance the transaction, and the likelihood that leverage improves over the next 18-24 months, possibly to within Moody's triggers for an upgrade,” Joseph Princiotta, Moody's vice president and senior credit officer, said in a news release.

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