Zebra Technologies Corp. Assigned #BB-# Rating On Planned Motorola Enterprise Business Outlook Stable

Stocks and Financial Services Press Releases Wednesday September 17, 2014 09:17
SAN FRANCISCO--17 Sep--Standard & Poor's
SAN FRANCISCO (Standard & Poor's) Sept. 16, 2014--Standard & Poor's RatingsServices assigned its 'BB-' corporate credit rating to Lincolnshire,Ill.-based Zebra Technologies Corp. The outlook is stable.

At the same time, we assigned a 'BB+' issue-level rating to the company'sproposed $2 billion senior secured term loan due 2021 and $250 millionrevolving credit facility due 2019; the '1' recovery rating indicates ourexpectation for very high recovery (90% to 100%) of principal in the event ofpayment default. We also assigned a 'B' issue-level rating to the company'sproposed $1.25 billion senior unsecured notes due 2022; the '6' recoveryrating indicates our expectation for negligible recovery (0% to 10%) ofprincipal in the event of payment default.

"The ratings reflect our view of the Enterprise business's inconsistentoperating performance and near-term integration risk, partially offset by thegood track record of the legacy Zebra business and the leading marketpositions of the combined company," said Standard & Poor's credit analystChristian Frank. "The ratings also incorporate our view that leverage islikely to fall below 5x during 2015 as the company realizes cost savings andrepays debt."

Our view of Zebra's business risk profile incorporates the inconsistent trackrecord of the Enterprise business, the integration risk associated with thistransformational acquisition, the combined company's narrow focus on thesupply chain technology hardware market, and its exposure to cyclical retailand manufacturing investment spending. Partially offsetting these factors arethe company's leading market positions in specialty printing, enterprisemobile computing, and data capture solutions; the good operating track recordof the legacy Zebra business with consistent revenue growth and profitability;and good channel partner relationships. We believe that the complementarynature of the Enterprise products and Zebra's unique knowledge of the companyfrom years of coordinating product roadmaps mitigate some of the integrationrisk.

Zebra's financial risk profile is characterized by leverage in the mid-5x areapro forma for the acquisition based on the 12 months ended June 2014, which weexpect to fall below 5x in 2015 as the company reduces expenses and uses itsfree operating cash flow (FOCF) to repay debt. We believe that the companywill limit its acquisition activity, reduce share buybacks, and allocate mostof its FOCF for debt repayment over the next 12 to 24 months.


Latest Press Release

Photo Release: EXIM Thailand Celebrates 25th Anniversary Promoting Thai Entrepreneurs to New Frontiers Market Penetration and Sharpening new SME Exporters Global Competitive Edge

Mr. Pisit Serewiwattana, President of Export-Import Bank of Thailand (EXIM Thailand), announced on the Bank's 25th anniversary, at EXIM Thailand's Head Office on February 21, 2019 that EXIM Thailand is ready to play its role in bridging the business...

Photo Release: Sansiri debentures worth 5.5 billion Baht are offered for subscription via four major banks until February 26

Mr. Apichart Chutrakul (center) Chief Executive Officer, Sansiri PCL., Mr. Thiti Tantikulanan (2nd from left), Capital Markets Business Division Head, KASIKORNBANK, Mr. Narin Opamuratawongse (left), Executive Vice President and Manager, Investment...

New World Development จับมือ ASTRI สร้างแพลตฟอร์มบล็อกเชนสำหรับซื้ออสังหาริมทรัพย์แพลตฟอร์มแรกของฮ่องกง โดยมี BOCHK เป็นธนาคารแห่งแรกที่เข้าร่วม

New World Development Company Limited (NWD) ประกาศว่า บริษัทได้สร้างแพลตฟอร์มบล็อกเชนสำหรับซื้ออสังหาริมทรัพย์แพลตฟอร์มแรกของฮ่องกง ร่วมกับ Hong Kong Applied Science and Technology Research Institute Company Limited (ASTRI) โดยมี Bank of China (Hong...

LGT opens wealth management office in Thailand for high net worth investors

LGT, the international private banking and asset management group owned by the Princely House of Liechtenstein, today announced the opening of its wealth management business in Thailand, following the successful award of regulatory approvals. Located in...

EXIM Thailand Celebrates 25th Anniversary Promoting Thai Entrepreneurs Opportunities in New Frontiers

EXIM Thailand Celebrates 25th Anniversary Promoting Thai Entrepreneurs' Opportunities in New Frontiers and Product and Knowledge Base Development to Enhance SME Exporters' Global Competitiveness Mr. Pisit Serewiwattana, President of Export-Import Bank of...

Related Topics