S&P gives Technimark, loans B-

S&P said it gave B- ratings to Technimark Holdings LLC and its planned $75 million revolving credit facility and $475 million first-lien term loan. The recovery rating on the loans is 3. The company also plans to secure an unrated $170 million second-lien term loan and an unrated $30 million delayed-draw second-lien term loan that the agency.

Oakhill Capital Partners is acquiring a majority stake in Technimark and plans to use the facilities to help fund the deal.

“Our rating on Technimark incorporates its high starting debt leverage pro forma for the new capital structure. The rating also reflects the company's aggressive financial policy, moderately high customer concentration, and low EBITDA margins relative to those of its rated peers. These weaknesses are somewhat offset by the strong momentum stemming from its new program wins, its high proportion of medical sales–which we view as relatively stable–and its long-standing relationships with its top customers,” S&P said in a press release.

The outlook is stable. “Despite some expected raw material headwinds, we anticipate the company will improve its EBITDA margins in 2021, which will reduce its leverage in the mid- to high-7x range. In addition, we forecast the company will further deleverage to around 7x in 2022,” the agency said.

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