TEXT - S&P comments on Equifax
Dec 3 - Standard & Poor's Ratings Services said today that its corporate credit and other ratings on Atlanta-based Equifax Inc. (BBB+/Stable/A-2) remain unchanged following the company's recent announcement that it has entered into definitive asset purchase agreement with Computer Sciences Corp. (BBB/Negative/A-2) to acquire its credit services business assets and operations for approximately $1 billion. The outlook is stable. CSC has been Equifax's largest credit affiliate, and Equifax has been processing CSC's credit information since 1988. When completed, the transaction will solidify Equifax's position in the U.S. credit services market, and we expect it to be accretive to earnings in 2013. We expect Equifax to fund the transaction with a combination of existing credit facilities, additional debt financing, and available cash. While we expect pro forma leverage to modestly exceed 2x in fiscal 2012, we also expect the company to maintain its conservative financial policies and moderate share repurchases, and use free cash flow to reduce leverage to no more than 2x exiting 2013. Our ratings on Equifax are based on the company's "satisfactory" business risk profile, distinguished by its strong position in the global credit management and reporting industry and its consistent profit margins, and its "intermediate" financial profile, supported by its solid free cash flow generation and conservative financial policies. In addition, the stable outlook reflects Equifax's large recurring revenue base and "adequate" liquidity.
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