Moody’s stabilizes Flow Control view

Moody's Investors Service said it changed the outlook for FR Flow Control Luxco 1 Sarl (Flow Control) to stable from positive and affirmed its B3 ratings.

“The affirmation of the ratings and outlook change to stable reflects Moody's expectation that improvement in key credit metrics will be protracted as a result of earnings pressures from macro headwinds, supply chain delays and a high-cost environment that will continue likely into 2023. Moody's expects these factors to lead to weaker results in 2022, including pro forma adjusted debt to EBITDA above 5.5x. Leverage approached 4.5x at the time of the acquisition of Termomeccanica Pompe (TM.P), a global manufacturer of pump and compressors, in April 2022.

“However, Flow Control's meaningful base of installed equipment should enable the company to leverage its aftermarket position for positive pricing and support modest margin expansion and lower leverage over the next year, aided by cost measures and lean initiatives,” Moody’s said in a press release.

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