S&P revises Technicolor to stable

Standard & Poor's said it revised its outlook on Technicolor SA and its subsidiary Thomson Licensing SAS to stable from positive and affirmed the B+ long-term ratings on Technicolor and Thomson Licensing.

Technicolor’s B short-term corporate credit rating was also affirmed.

At the same time, the agency affirmed its B+ issue rating and 3 recovery rating on Technicolor's senior secured debt, and the B+ issue rating on the senior secured debt issued by Luxembourg-based special-purpose vehicle Tech Finance & Co SCA.

S&P said the outlook revision follows Technicolor's announcement that it is acquiring Cisco's Connected Devices (CCD) operation for about €550 million, funded through about €137 of equity, and a combination of debt and balance-sheet cash.

S&P assumed an estimated 80-20 debt-cash mix, which would weaken the company's adjusted leverage metrics for the next two years to about 2.9 times from about 2.1 times previously, even after inclusion of significant cost synergy expectations.

In addition, the agency said it sees execution risk of integrating CCD and maintain Connected Home's rate of organic growth.

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