Moody’s could raise inVentiv

Moody's Investors Service said it placed the ratings of inVentiv Group Holdings, Inc. under review for upgrade following the May 10 announcement of an all-stock merger with INC Research Holdings, Inc.

Ratings under review include inVentiv's B3 corporate family rating, B3-PD probability of default rating, B2 senior secured term loan B rating and Caa2 senior unsecured notes ratings.

Moody's expects that the combined company will have meaningfully lower financial leverage than inVentiv on a standalone basis (currently about 7 times). INC's debt/EBITDA is currently 2.2 times. It estimates pro forma adjusted debt/EBITDA of about 5 times (before any synergies) for the 12 months ended Dec. 31, 2016.

“InVentiv will benefit from better credit metrics and significantly increased scale and business line diversity. The combined company will have over $3 billion in revenues and a leading market position in pharmaceuticals contract research and commercialization services,” Moody’s said in a news release.

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