Asia FX moves little with focus on US-China trade, dollar steadies ahead of CPI
Investing.com -- S&P Global Ratings has placed MRC Global (NYSE:MRC) (US) Inc.’s ratings on CreditWatch with positive implications following the company’s announced all-stock merger with DNOW Inc.
The rating action comes after MRC Global and DNOW entered into a definitive merger agreement on Wednesday. S&P currently maintains a ’B’ issuer credit rating on MRC and its first-lien term loan.
According to S&P, the combined company could benefit from a broader end market and product range, along with a larger footprint that might strengthen MRC’s competitive position. While both companies provide similar products such as pipes, fittings, and valves to energy and industrial customers, they have different strengths that could complement each other.
DNOW specializes in pumps and focuses on upstream applications, while MRC provides specialized equipment to gas distribution utilities. This difference creates cross-selling opportunities for the combined entity, S&P noted.
The rating agency also highlighted potential cost efficiencies through the elimination of duplicate expenses and the advantages of a larger branch network and sales force.
From a financial perspective, S&P anticipates the combined company’s adjusted debt to EBITDA could be lower than MRC’s current 2.6x ratio, as DNOW has minimal funded debt. As of March 31, 2025, DNOW reported no funded debt and only modest operating lease and pension liabilities.
S&P expects to resolve the CreditWatch placement when the transaction completes, which is anticipated in the fourth quarter of 2025. The rating agency may raise MRC’s issuer credit rating if the merger provides significant scale advantages and diversifies its product portfolio, while maintaining appropriate credit metrics and financial policy.
The merger remains subject to regulatory approval.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.