S&P places Tempo on positive watch

S&P said it placed Tempo Acquisition LLC’s (Alight Solutions) ratings on CreditWatch with positive implications.

Tempo announced its plan to sell its professional services and Human Capital Management and payroll outsourcing businesses in a deal valued at $1.2 billion. In connection with the sale, management has committed to using some of the proceeds to repay debt, which could improve S&P Global Ratings-adjusted debt to EBITDA by about half a turn to under 5x, the agency said.

“The CreditWatch placement reflects our view that Tempo's credit ratios will improve consistent with BB- rated peers. We expect the deleveraging will improve Tempo's S&P Global Ratings-adjusted leverage under 5x, from 5.2x at 2023 year-end. We expect free operating cash flows (FOCF) will continue to trend positively due to the higher profitability of the remaining business,” the agency said in a statement.

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