Moody's assigns Sycamore Buyer Ba3

Moody's Investors Service said it gave first-time ratings to Sycamore Buyer LLC, including a Ba3 corporate family rating, a Ba3-PD probability of default rating, Ba3 ratings on a planned $750 million of first-lien revolver due 2026, a $1 billion first-lien term loan A1 due 2026, a $750 million first-lien farm credit term loan A2 due 2028 and a $750 million first-lien term loan B due 2028.

Sycamore will use the proceeds combined with a $2.2 billion cash equity investment from Cargill, Inc. and a material equity rollover from Continental Grain and Healthcare of Ontario Pension Plan of their investment in Wayne Farms, will be used to finance the acquisition of Sanderson Farms. Proceeds will also be used to pay transaction fees.

“Sycamore Buyer, LLC's Ba3 corporate family rating reflects the combination of Wayne Farms and Sanderson Farms, which will create the third largest poultry producer in the U.S. with pro forma LTM revenues of nearly $7 billion as of June 30, 2021. Wayne Farms is currently the seventh largest poultry producer in the U.S. and Sanderson is the third largest; however, by combining, they will form a much stronger competitor behind Tyson Foods, Inc. (Baa2 stable) and Pilgrim's Pride Corp. (Ba3 stable), the #1 and #2 poultry producers in the U.S., respectively,” Moody’s said in a press release.

The outlook is stable.

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