- Vizient Inc.'s leverage is trending lower, and we believe it will remain below 4.5x.
- We are raising our issuer credit rating to 'BB-' from 'B+'. The outlook is stable.
- We are assigning a 'BB-' issue-level rating to the proposed first-lien debt. The recovery rating is '3', indicating our expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default.
- The stable outlook reflects our expectation that the company's revenue will increase at a low- to mid-single-digit percentage rate and its EBITDA margin will remain stable to slightly lower.
NEW YORK (S&P Global Ratings) April 5, 2019--S&P Global Ratings today took the rating actions listed above. We raised the rating because we expect the company to pursue its acquisition strategy but keep leverage below 4.5x. The company's growth and debt reduction has enabled it to reduce leverage. Its ample cash flow enables both actual debt repayment and the capacity to fund modest acquisition activity. We believe that the company will generate more than $200 million in discretionary cash flow, which the company will use for tuck-in acquisitions. The stable outlook reflects our expectation that the company's revenue will increase at a low- to mid–single-digit percent rate and its EBITDA margin will remain stable or modestly erode. It also reflects our expectation that despite acquisition activity, leverage will remain below 4.5x.
