S&P Global Ratings revised its outlook on Lineage Logistics LLC to stable from positive after the temperature-controlled logistics solutions provider agreed to buy rival Preferred Freezer Services LLC.
The deal, signed for an undisclosed amount, is anticipated to close in the second quarter and will give the the merged entity more than 1.3 billion cubic feet of temperature-controlled capacity across more than 200 facilities in North America, Europe and Asia.
The ratings agency's outlook reflects its expectation that Lineage will benefit from increased scale and a broader geographic presence, while the company's credit metrics are projected to remain high through 2019, with debt to EBITDA of at least 10x and funds from operations to debt in the mid-single-digit percent region.
Lineage's debt to EBITDA is expected to lower to around mid-7x and FFO to debt is estimated to increase to the high-single-digit percent region in 2020 due to full contributions from its recent acquisitions, according to Ratings.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.