Parex 'B' Ratings Placed On CreditWatch Positive On Announcement Of Acquisition By Sika AG

  • On Jan. 8, 2019, Sika AG (A-/Negative/A-2) announced that it had made a binding offer to acquire France-based specialty dry mix producer Financiere Dry Mix Solutions S.A.S. (Parex, or the company).
  • We are placing on CreditWatch with positive implications our 'B' long-term issuer credit rating on Parex and our 'B' issue rating on its €865 million Term Loan B.
  • The positive CreditWatch placement reflects our view that we could raise or affirm the ratings on Parex. We plan to resolve the CreditWatch placement after the transaction closes.
PARIS (S&P Global Ratings) Jan. 10, 2019--S&P Global Ratings today took the 
rating actions listed above. The CreditWatch placement follows the 
announcement on Jan. 8, 2019 that Sika plans to acquire Parex. Sika's 
management anticipates that the transaction will close in the second or third 
quarter of 2019, subject to the French works council consultation process and 
regulatory approvals.

If Sika completes the proposed acquisition of Parex, we could raise the 
ratings on Parex by multiple notches, or potentially equalize the ratings with 
those on Sika. This would depend on, among other factors, the extent to which 
the company integrates with Sika, whether Parex's existing debt facilities are 
kept in place, repaid, or refinanced, and the overall strategy that Sika 
decides to follow regarding Parex's operations, balance sheet, and cash flows.

We will monitor developments in the coming months to gain clarity on these 
issues and ascertain the impact of the proposed acquisition on the company's 
credit profile.

We plan to resolve the CreditWatch placement once the proposed transaction is 
completed. Upon the successful completion of the acquisition and the 
resolution of the CreditWatch placement, we could raise our ratings on Parex 
by multiple notches or equalize them with those of Sika. We will likely affirm 
our 'B' rating on Parex if the transaction does not take place.
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