S&P fixes Culligan outlook to stable

S&P said it revised its outlook for Osmosis Holdings LP (Culligan) to stable from negative and affirmed all its ratings, including the B issuer rating.

“We expect Culligan's profitability will materially expand after 2023 as nonrecurring charges moderate and it continues to deliver solid organic growth. Culligan's organic growth has remained resilient in a tough macroeconomic environment. We believe this is partially attributable to geographic expansion and acquisitions over recent years that helped support a mix shift to commercial drinking water services that drive stickier, recurring revenues,” S&P said in a press release.

The agency said it forecasts Culligan to deliver positive free operating cash flow in 2023 and to “deleverage comfortably below 8x in 2024 and maintain EBITDA cash interest coverage above 2x despite its continued pursuit of tuck-in acquisitions.”

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