-- Nuclear services provider EnergySolutions Inc. announced that it
has entered into an agreement to be acquired by a subsidiary of unrated
energy-focused private equity sponsor Energy Capital Partners.
-- We are placing our ratings on EnergySolutions Inc. on CreditWatch with
On Jan. 7, 2013, Standard & Poor's Ratings Services placed its ratings,
including its 'B' corporate credit rating, on EnergySolutions Inc. on
CreditWatch with developing implications.
The CreditWatch placement follows Salt Lake City-based nuclear services
provider EnergySolutions Inc.'s announcement that it has entered into a
definitive agreement to be acquired by a subsidiary of Energy Capital Partners
II, which is an investment fund of Energy Capital Partners (ECP). ECP is an
energy-focused private equity sponsor with more than $7 billion in capital
commitments. According to the terms of the agreement, EnergySolutions'
shareholders will receive $3.75 in cash for each share of common stock, which,
based on 90.3 million of common shares outstanding reported at Nov. 7, 2012,
is approximately $338.5 million. The company's adjusted debt at Sept. 30, 2012
was $583 million, or roughly 3.6x its trailing-12-months' adjusted EBITDA. The
adjusted debt figure is calculated net of more than $300 million in restricted
cash and includes approximately $72 million related to the capitalization of
operating leases and asset retirement obligations. EnergySolutions is
permitted to seek superior proposals from third parties until Feb. 6, 2013.
The acquisition is subject to customary closing conditions, including
regulatory approvals in the U.S. and U.K. and the approval by EnergySolutions'
The ratings are on CreditWatch with developing implications. Per the terms of
the agreement, EnergySolutions is permitted to engage in discussions with
other suitors, which may include other financial sponsors or strategic buyers.
Depending on the final proposal, the impacts to EnergySolutions' financial
risk profile and operating strategy could prompt us to raise, lower, or affirm
the ratings. We plan to meet with management to discuss the acquisition and to
resolve the CreditWatch following a review of the transaction. We expect to
resolve the CreditWatch during the next several weeks after evaluating the new
capital structure, the sponsor's financial policies, and management's business
Related Criteria And Research
-- Criteria Methodology: Business Risk/Financial Risk Matrix Expanded,
May 27, 2009
Ratings Placed On CreditWatch Developing
Corporate Credit Rating B/Watch Dev/-- B/Negative/--
Senior Secured BB-/Watch Dev BB-
Recovery Rating 1 1
Senior Unsecured B/Watch Dev B
Recovery Rating 3 3
Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left