S&P gives Flow Control B-

S&P said it assigned B- ratings to FCG Acquisitions Inc. (Flow Control Group) and its planned first-lien debt. The recovery rating on the undrawn $80 million revolving credit facility due 2026, a $525 million first-lien term loan due 2028, a $100 million first-lien delayed-draw term loan due 2028 (undrawn at close) is 3. Flow Control also plans to secure a $110 million second-lien term loan due 2029, which S&P gave a CCC rating with a 6 recovery rating.

KKR plans to acquire the company and will use the debt to fund the transaction.

“Our ratings reflect the company's narrow business focus, negligible market share in the fragmented and highly competitive industrial distribution industry, and high S&P Global Ratings-adjusted leverage of over 7x in 2021,” S&P said in a press release.

The agency assigned a stable outlook, reflecting that Flow Control will increase its organic revenues and expand its EBITDA margins over the next 12 months.

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