Moody's reviews Kito Crosby's ratings for upgrade after Columbus McKinnon acquisition
Investing.com -- Moody's (NYSE: MCO ) Ratings has placed the ratings of Crosby US Acquisition Corp., also known as Kito Crosby, under review for an upgrade. This includes the B2 corporate family rating (CFR), B2-PD probability of default rating, and B2 senior secured first lien bank credit facilities rating. Before this action, Kito Crosby's outlook was stable.
This review follows the news that Columbus McKinnon (NASDAQ: CMCO ) Corporation has agreed to acquire Kito Crosby for $2.7 billion in cash. The purchase is set to be funded with $2.6 billion in committed debt financing and a $0.8 billion perpetual convertible preferred equity investment from CD&R. The transaction is anticipated to be finalized later this year, pending regulatory approvals and the completion of standard closing conditions.
Moody's decision to review Kito Crosby's ratings for an upgrade is based on the fact that the company will become part of Columbus McKinnon, a higher rated and well-capitalized entity. The merger is expected to provide greater scale and significant synergy opportunities over the next three years. Furthermore, Kito Crosby's existing debt has a change of control provision, leading to the expectation that it will be repaid in conjunction with the transaction. If the debt is repaid, Moody's will withdraw Kito Crosby's ratings upon the transaction's completion.
Kito Crosby is recognized as a global market leader in the design, manufacture, and support of safe and reliable lifting and securement solutions. The company serves a diverse range of end markets, from industrials to aquaculture, and maintains a specialized network of distributor relationships within the industry.
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