TEXT-S&P:Church & Dwight's acqstn plans don't affect rtgs
Aug 21 - Standard & Poor's Ratings Services said today that its ratings and outlook on Princeton, N.J.-based Church & Dwight Co. Inc. (BBB/Positive/A-2) are not affected at this time by the company's announcement that it has signed a definitive agreement to acquire Vancouver, Wash.-based Avid Health Inc. for about $650 million.
Our assessment of Church & Dwight's financial risk as "intermediate" (as we describe the term in our criteria) incorporates our assumption that the company's credit ratios will weaken over time--most likely due to debt-financed acquisitions--including total leverage in the low-2x area and funds from operations (FFO) to total debt in the 35% to 40% range. Pro forma for this debt-financed acquisition, we estimate leverage and FFO to total debt of about 1.6x and 45%-50%, respectively, levels which are consistent with our "modest" financial risk descriptor.
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