S&P gives FloWorks, loan B-

S&P said it gave B- ratings to FloWorks International LLC and its planned $270 million first-lien term loan due February 2029. FloWorks also plans to obtain an unrated $60 million asset-based lending facility due December 2026.

The company is securing the term loan to fund the acquisition of SemiTorr Group and to refinance its capital structure.

“We expect S&P Global Ratings-adjusted debt to EBITDA of more than 5x at transaction close (we forecast about 6x in 2021 and improving to about 5x in 2022). FloWorks has a smaller scale than larger industrial distributors and a narrow business focus on specialty flow control components. These factors are offset in part by its maintenance, repair and operations (MRO)-driven revenue model, which represents a large share of revenue (about 76%) and product offerings that are somewhat insulated from commodity price fluctuations,” in a press release.

The outlook is stable.

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