Dun & Bradstreet’s credit rating under review at S&P after Clearlake acquisition

Investing.com -- S&P Global Ratings has placed Dun & Bradstreet (NYSE:DNB_old) Holdings Inc.’s (D&B) credit rating under review with negative implications following the announced acquisition by Clearlake Capital Group L.P. D&B, a Jacksonville, Fla.-based information services company, is set to be acquired for approximately $7.7 billion, which includes an outstanding debt of about $3.6 billion.

The credit rating agency has placed its ’B+’ issuer credit rating on D&B on CreditWatch due to potential concerns about the company’s future leverage. It is expected that D&B’s pro forma leverage could rise significantly above the current 6x ratings threshold, possibly resulting in a downgrade to the low ’B’ rating category.

Clearlake Capital Group L.P. has secured a $5.75 billion 364-day senior secured bridge loan facility and $2.3 billion of equity financing commitments in conjunction with the acquisition agreement. This transaction is likely to result in higher debt levels for D&B, which already has a high leverage with net debt to EBITDA of 5.6x as of Dec. 31, 2024. The company’s cash flow measures are also expected to weaken further.

The acquisition is expected to close in the third quarter of 2025, subject to shareholder and regulatory approvals. S&P Global Ratings will resolve the CreditWatch once more information regarding the post-acquisition financing and capital structure becomes available.

The acquisition agreement includes a "go-shop" period until April 22, 2025, during which D&B may seek alternative acquisition proposals from third parties. This period can be extended for an additional 15 days if a superior bid emerges.

S&P Global Ratings has indicated that it could lower D&B’s issuer credit rating to the low ’B’ category under the current financing agreement if the acquisition goes through. However, if the sale transaction does not materialize, the rating could be affirmed.

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