S&P gives Vialto, loans B-

S&P said it assigned B- ratings to Vialto Partners and its planned first-lien loans to be issued through Vialto US Opco Inc.

Clayton, Dubilier & Rice plans to acquire the unit from PricewaterhouseCoopers. The deal is expected to close in the quarter ending June 30.

“We believe costs to carve out Vialto's global business from PwC will likely be extensive. Building out its back-office infrastructure and system implementations are some areas where we expect the company to incur significant expenses in the coming year. As a result, we forecast $65 million-$85 million in free operating cash flow (FOCF) deficits through fiscal 2023 (ending June 2023). We expect the company will have adequate liquidity at transaction close, with about $100 million of cash and an undrawn $200 million revolving credit facility to support cash flow shortfall,” S&P said in a press release. It sees FOCF turning positive in fiscal 2024.

Vialto US Opco plans to issue a $950 million first-lien term loan, a $200 million revolving credit facility, undrawn at close, and a $400 million second-lien term loan.

The outlook is stable.

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