S&P rates Storable B-, loans B, CCC

S&P said it assigned a B- rating to Storable Inc., a B rating with a 2 recovery rating to its planned $425 million first-lien term loan and a CCC rating with a 6 recovery rating to its planned $150 million second-lien loan.

Storable plans to use the proceeds to partially fund the $2 billion leveraged buyout by financial sponsor EQT Partners.

“High starting leverage, growth investment needs, and financial sponsor ownership will likely keep adjusted leverage higher than 8x through 2022. Our ratings reflect Storable’s very high adjusted leverage, over 10x on an S&P Global Ratings’ adjusted basis pro forma as of Dec. 31, 2020, and the risk that financial policy remains aggressive under its new financial sponsor owner EQT Partners,” S&P said in a press release.

The outlook is stable. “In 2021, we expect organic revenue growth in the low-teens percent area to about $179 million, adjusted EBITDA margins in the mid-30% area, adjusted leverage declining to about 9x from well over 10x at transaction close, and low-to-mid-single-digit percent area free operating cash flow (FOCF) to debt,” the agency said.

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