Aptos (Cayman) LP Downgraded To #B-# On Revenue Pressure And Declining Outlook Stable

Stocks and Financial Services Press Releases Thursday June 29, 2017 09:27
NEW YORK--29 Jun--S&P Global Ratings

NEW YORK (S&P Global Ratings) June 28, 2017--S&P Global Ratings today loweredits corporate credit rating on Atlanta-based Aptos (Cayman) LP to 'B-' from'B'. The outlook is stable. At the same time, we lowered our issue-levelrating on the company's $225 million first-lien term loan to 'B-' from 'B'.

The recovery rating remains '3', indicating our expectation for meaningful(50%-70%; rounded estimate: 55%) recovery for lenders in the event of apayment default.

The 'B-' corporate credit rating reflects our view of Aptos's adjustedleverage near the low 7x area, pro forma for the BTE acquisition completed inSeptember 2016. We further expect that leverage will remain near the 7x areathrough fiscal 2017 in contrast to our prior expectation for the low-5x area.

The integration of BTE, an exclusive reseller of Aptos's products in the U.K.,is mostly complete, but this business has underperformed our expectations dueto foreign currency pressures resulting from Brexit and increasedconcentration in BTE's lower-margin hardware businesses. On a consolidated

basis, Aptos has experienced significant margin contraction due to theintegration of the lower-margin BTE business and a substantially higher mix oflower-margin hardware equipment revenue. Although we acknowledge retailconditions are increasingly challenging, Aptos's ability to provide software

facilitating the transition to omni-channel retailing should lead to modestrevenue growth over the next 12 months.
The stable outlook reflects our expectation that Aptos will achieve modesttop-line and EBITDA growth over the next 12 months, while maintaining positivefree cash flow generation and adequate liquidity.

We could lower the rating on Aptos if disruptions to the business or macropressures lead to declines in customer renewal rates, such that the companyexperiences revenue declines and/or generates negative free operating cashflow on a sustained basis, maintains inadequate liquidity, or if we deem thecapital structure unsustainable over the long term.

Although unlikely over the next 12 months, we could raise the rating on Aptosif the company is able to realize modest synergies and achievemid-single-digit organic revenue growth leading to margin expansion. Thiswould have to be coupled with sustaining adjusted leverage below 6x inconjunction with free operating cash flow as a percentage of debt in themid-single-digit area.

Latest Press Release

AEON partners with JCB to launch AEON J-Premier Platinum Credit Card to offer exclusive privileges throughout Thailand and Japan

AEON Thana Sinsap (Thailand) Public Company Limited partners with JCB International (Thailand) Co., Ltd. to launch "AEON J-Premier Platinum Credit Card" that will allow Thais to enjoy everything Japan, with exclusive privileges and offers in dining,...

China and Europe post double digit increases in RD spending

- China and Europe increase R&D spending the most as global R&D investment reaches US$782bn - 88 companies outperform industry peers on sustained financial success with modest R&D spend - Amazon retains top spot as world's largest corporate...

Photo Release: EXIM Thailand Hosts 6th Council of Specialized Financial Institutions Meeting in 2018

Mr. Pisit Serewiwattana (forth right), President of Export-Import Bank of Thailand (EXIM Thailand), welcomed Mr. Pornchai Triraveja (fifth right), Fiscal Policy Advisor of Fiscal Policy Office (FPO), and Mr. Chatchai Sirilai (fifth left), President of...

Kinesis Money and Allocated Bullion Exchange Explore Creating a Joint Commercial Blockchain Venture with Jakarta Futures Exchange in Indonesia

Today, Jakarta Futures Exchange (JFX), the leading futures and derivatives exchange group in Indonesia, have announced an expanded Memorandum of Understanding (MOU) with Kinesis Money and Allocated Bullion Exchange (ABX). The partnership will seek to...

Photo Release: SCB and Mae Fah Luang University Make Headway for Cashless Society with Smart University Program

"The Siam Commercial Bank (SCB)", the leader in digital lifestyle banking, continues to pave way for a cashless society at universities across Thailand. The partnership with Mae Fah Luang University continues its "Smart University" program. MFU App is...

Related Topics