French Trade Show Organizer Comete Holding SAS 'B' Rating Affirmed On Sale To Credit Agricole Assurances; Outlook Stable

  • Credit Agricole Assurances proposes to acquire Charterhouse Capital Partner's stake in French trade show organizer Comexposium for €877 million, through newly created holding company Cassini SAS.
  • We project that the acquisition financing will not lead to a material deterioration in Comexposium group's debt metrics.
  • We are affirming our 'B' long-term rating on Comete Holding SAS, the current parent of Comexposium, and our 'B' rating on Comete's existing €455 million senior secured facilities. The outlook remains stable.
  • We expect to withdraw the ratings on Comete upon completion of the proposed transaction.
FRANKFURT (S&P Global Ratings) Jan. 25, 2019--S&P Global Ratings today took 
the rating actions listed above. The affirmation reflects our view that after 
the planned acquisition and refinancing of the existing senior secured 
facilities, Comete's debt projection metrics will not materially change. We 
believe that the group's S&P Global Ratings-adjusted debt to EBITDA will 
remain above 5x and that the company will continue to post positive free cash 
flow. 

Predica, a fully owned subsidiary of Credit Agricole Assurances (CAA; 
A-/Stable/--), itself the insurance arm of Credit Agricole Group 
(A+/Stable/A-1), plans to acquire Charterhouse Capital Partner's stake in 
Comexposium group. We understand that the purchase price is €877 million. The 
second shareholder, Chambre de Commerce et d'Industrie de Paris Ile de France 
(CCIR), will maintain its historical ownership in the group. The two 
shareholders have created Cassini SAS, a new holding company, which will 
acquire the entire equity capital from current parent, Comete Holding SAS.

We expect to withdraw the ratings on Comete Holding SAS and on the existing 
senior secured facilities, including the €355 million term loan B due 2025 and 
the €90 million revolving credit facility (RCF) due 2024, once the transaction 
is complete and the senior secured facilities are repaid. 

The stable outlook reflects our view that the group's adjusted debt to EBITDA 
will remain above 5x but that the group will continue to post positive free 
operating cash flow (FOCF). It also reflects our expectation that the group 
will increase its revenues on an annualized basis, fueled by organic growth of 
its trade shows, the group's ability to create new shows, and bolt-on 
acquisitions. We also expect Comexposium to have adequate liquidity, supported 
by the fully available RCF and low capital requirements.

A negative rating action would most likely result from material or 
transformative debt-funded acquisitions (since Comexposium operates in highly 
fragmented trade show market), material debt-funded shareholder returns, or 
operational underperformance. This would result in delayed deleveraging--we 
measure leverage on a weighted average basis to incorporate the seasonality 
between even and odd years. We could also lower the rating if Comexposium 
underperformed operationally, leading to deterioration of profitability, 
negative FOCF, and weakened liquidity.

An upgrade of Comexposium is remote over the next 12 months, given the ongoing 
transaction. However, we could raise the rating if adjusted debt to EBITDA 
decreased sustainably to below 5x, together with sizable FOCF. Any rating 
upside would also hinge on the group having adequate liquidity and committing 
to a more conservative financial policy than in the past.

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