The Recycler
  • G&G Feb 24 Masthead Banner
  • Katun web banner December 2022 NEW
  • Biuromax Masthead web banner March 2024

Moody’s affirms B3 ratings for Clover

April 3, 2019

(Credit: Scroll)

Moody’s Investors Service has affirmed its B3 Corporate Family Rating (CFR) and B3-PD Probability of Default Rating (PDR) for 4L Technologies Inc., the parent company of Clover.

Following Moody’s decision to upgrade 4L Technologies (4L Tech) from negative to stable in September last year, the agency has announced its affirmation of B3 CFR and B3-P PDR for the company.

Moody’s has concurrently assigned B3 ratings to the company’s proposed reduced, amended, extended, and re-priced senior secured first lien term loan due 2022 and first lien revolving credit facility due 2022. The ratings outlook is stable.

4L Tech, Clover’s parent company, collects, remanufactures and distributes laser and inkjet printer cartridges and wireless devices through manufacturing facilities in the United States, Mexico, Europe, and Asia regions. The company’s main customers include leading office product retailers and wireless carriers in the United States. 4L Tech has been majority-owned by Golden Gate Private Equity, Inc. (“Golden Gate”) since 2010. For the twelve months ended 31 December 2018, the company’s pro forma revenue (excluding the telecom business) was $820 million, reveals Moody’s (€729.1 million). 

According to Moody’s lead analyst Andrew MacDonald, “Moody’s is affirming the B3 CFR because although we view the proposed transaction favourably as it deleverages the balance sheet and modestly extends debt maturities, we believe there will be continued headwinds in the print cartridge business. Leverage will be set at a modest level at close, but we anticipate it will increase slightly in 2019 from a wider-than-average variety of product mix in 2019 that will initially weigh on margins before stabilising thereafter. Longer term, we expect leverage to improve primarily driven by free cash flow generation that will be used for debt repayment and mitigate earnings pressure.”

As Moody’s explains, 4L Tech’s B3 CFR largely reflects the business risks inherent in the mature printing market and highly competitive nature of the company’s wireless segment, both of which experienced revenue declines in 2017 and 2018. Moody’s says the rating also incorporates the company’s small revenue size, high customer concentration and limited end market diversification.

Nonetheless, the rating incorporates Moody’s expectation that operational improvements within 4L Tech’s wireless business and cost reduction initiatives in its imaging business will mitigate margin pressure as the company’s revenue mix shifts in the wireless business.

The stable outlook reflects Moody’s expectation that the company’s operational improvements will be sustained, adds the agency, and that the company will generate positive free cash flows at stable margins during the next 12-18 months. The outlook also incorporates Moody’s expectation that 4L Tech will maintain good liquidity.

Categories : City News

Tags : 4L Technologies Clover Clover Imaging Group Moody's Printer Cartridges Ratings

  • Static Control June 2022 Big & Bold Ad
  • Mito Web advert July 2023
  • GM Technology Web Ad March 2024
  • IR Italiana Web ad January 2021
  • Cartridge Web Ad March 2024
  • Biuromax March 2024 Banner
  • G&G Big & Bold Web banner January 2024
  • TN Group Web ad March 2024
  • Aster Feb 2024 Web Ad
  • Ink Tank Web Ad March 2024
  • Apex Web Ad March 2024
  • HYB Web banner Jan 2024
  • ITP Web ad January 2021
  • PCL Feb 2024 Web Ad
  • Zhono Web ad March 2024
  • CET Web ad December 2023
  • Denner Feb 2024 Web Ad
  • Altkin Web ad March 2024
  • Altkin Web ad March 2024
  • HYB Web banner Jan 2024
  • ITP Web ad January 2021
  • PCL Feb 2024 Web Ad
  • CET Web ad December 2023
  • Zhono Web ad March 2024
  • Denner Feb 2024 Web Ad
  • CET Web ad December 2023
  • ITP Web ad January 2021
  • HYB Web banner Jan 2024
  • PCL Feb 2024 Web Ad
  • Denner Feb 2024 Web Ad
  • Altkin Web ad March 2024
  • Zhono Web ad March 2024

The Recycler, Wittas House, Two Rivers, Station Lane, Witney, OX28 4BH, United Kingdom | Tel: +44 (0) 1993 899800 | Fax : +44 (0) 1993 226899
©2006-2023 The Recycler - Terms & Conditions - Privacy Policy including cookie use

Web design Dorset | Websites by Mark

The Recycler Subscribe Web ad January 2021
The Recycler Subscribe Web ad January 2021