Moody’s rates Element Materials loans B2

Moody’s Investors Service said it assigned a provisional B2 corporate family rating to Element Materials Technology Ltd.

The agency also said it assigned a provisional B2 rating to the $225 million term loan B1 facility due 2023, raised by EMT Finance Inc., along with a provisional B2 rating to the $210 million term loan B2 facility due 2023, $70 million capital expenditure/acquisition facility due 2023 and $30 million revolving facility due 2022 raised by EMT 2 Holdings Ltd. and EMT Finance Inc., both subsidiaries of Element.

The outlook is stable.

The proceeds of the term loans B1 and B2 will be mainly used to fund the purchase consideration of Element by its new private equity owner, Bridgepoint, from 3i, Moody’s said.

The acquisition facility and revolving facility will be undrawn at the closing of the transaction and will be available to fund Element’s future capital expenses, acquisition and working capital needs, the agency said.

The ratings reflect the company’s well-established position in its niche markets, supported by high barriers to entry in the technically demanding testing market and significant switching costs for customers, Moody’s said.

The ratings also consider the company’s good liquidity position, but are constrained by the company’s high adjusted leverage at the closing of the transaction at 5.3x, the agency said.

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