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

Fitch Affirms Standard Chartered Bank (Thai) at #A-#; Outlook Stable

Fitch Ratings has affirmed Standard Chartered Bank (Thai) Public Company Limited's (SCBT) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at 'A-' with a Stable Outlook. At the same time, the agency has affirmed SCBT's National...

Photo Release: KBank recognized as having the highest corporate brand value in the banking business category 2nd consecutive year

At Sukree Kaewcharoen Auditorium, the Stock Exchange of Thailand (SET), Ms. Kattiya Indaravijaya, KBank President, recently represented KBank to receive the "Thailand's Top Corporate Brand Values 2018" award in the banking business category from...

MicroBitcoin Open Source Community เซ็นสัญญากับสมาพันธ์แรงงานในเกาหลี เปิดโอกาสให้แรงงาน 1.5 ล้านคนได้ใช้เงินดิจิทัล

MicroBitcoin Open Source Community เซ็นสัญญากับสมาพันธ์แรงงาน Korea Association of Care Workers (KACW) เพื่อนำสกุลเงินดิจิทัล MicroBitcoin มาใช้ สัญญานี้ลงนามร่วมกันสามฝ่าย ได้แก่ MicroBitcoin Open Source Community, KACW และ Bluequotient...

MicroBitcoin Open Source Community Signs an Exclusive Contract with the Korea Association of Care Workers (KACW) to Expand its Usability to One and a Half Million Users

The MicroBitcoin Open Source Community has signed a contract with Korea Association of Care Workers (KACW) to adapt the MicroBitcoin blockchain network protocol. The trilateral contract was made between the MicroBitcoin Open Source Community, the Korea...

WICE establishes a joint-venture, EUROASIA TOTAL LOGISTICS, with its holding 40% of shares to provide cross-border transport services between China, Hong Kong

WICE establishes a joint-venture, "EUROASIA TOTAL LOGISTICS", with its holding 40% of shares to provide cross-border transport services between China, Hong Kong, and South East Asia with the expectation to achieve the first year's revenue at 200 million...

Related Topics