Essity’s M&A leverage increase draws ratings agency scrutiny

By Mike Turner
29 Apr 2021

Essity, a Swedish personal hygiene company, has seen pressure from Moody’s and its bonds’ cash price drift lower, after announcing a debt-funded €567m-equivalent acquisition for almost all of Colombia’s Productos Familia.

Essity has agreed to buy 44% more of Familia to add to the 50% it already owns, in a deal that values the target company at $1.54bn.

The acquisition will be fully funded through debt, with Essity already lining up committed credit facilities.

However, the Baa1/BBB+ rated name is seeing ...

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