S&P gives B to Normec, loan

S&P said it gave preliminary B ratings to TICC Services Provider Normec 1 BV and its planned €565 million term loan. The recovery rating for the loan is 3 (60%). Normec also plans to secure a €120 million revolver and a €100 million delayed-draw term loan. The outlook is stable.

“We forecast S&P Global Ratings-adjusted debt to EBITDA of 6.6x at end-2024 before falling towards 6x in 2025, with the company maintaining good free operating cash flow (FOCF) thanks to organic revenue growth of about 8% per year and close to €70 million of estimated annualized revenue from mergers and acquisitions (M&A), and gradually improving EBITDA margins towards 22%,” S&P said in a press release.

However, “We consider the limited scale and focus on niche markets as constraining Normec's business risk profile, while talent scarcity is a challenge to the industry,” the agency added.

Normec will use the new loan and balance sheet cash to refinance its debt.

S&P said the outlook reflects the expectation of gradual deleveraging to 6x over the next 12-18 months.

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