S&P Global Ratings placed its ratings on Mallinckrodt Plc, including the BB- corporate credit rating, on CreditWatch with negative implications.

The CreditWatch placement comes after the company's decision to acquire Sucampo Pharmaceuticals Inc. for $1.2 billion.

S&P said the acquisition raises the company's debt leverage, and the agency believes that despite the company's solid cash flow generation, adjusted debt leverage could remain elevated.

The rating agency expects to resolve the CreditWatch when the transaction closes and may update the CreditWatch when it has more clarity about the company's expectations for 2018 and further information on the company's financial policy and its plans to reduce leverage.

S&P anticipates that if it lowers the rating, it would be limited to one notch.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.