S&P rates Franchise Group, notes B+

S&P said it assigned B+ ratings to Franchise Group Inc. and its planned $650 million in senior notes to refinance its debt. The agency also assigned a 4 recovery rating.

“The B+ rating reflects our assessment of the company's limited track record of operating multiple business segments offset by a manageable debt level and our expectation for decent free operating cash flow (FOCF) generation. The rating also incorporates our view of the company's aggressive acquisition strategy that we expect will continue and presents inherent integration risks,” S&P said in a press release.

The agency gave the company a stable outlook. “The stable outlook reflects our expectation for improving EBITDA and cash flow generation as the company benefits from cost synergies from its recent acquisitions,” S&P said.

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