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The corporate credit rating of IT staffing firm Insight Global was lowered to a “B” from a “B+” by Standard & Poor’s Ratings Services after the announcement Insight Global was being acquired by private equity investor Ares Management LLC, according to the ratings agency.
S&P reported a $300 million first-lien loan and a $130 million second-lien loan were put in place for a leveraged acquisition of Insight Global.
“The downgrade reflects Standard & Poor’s view that higher debt and interest expense associated with the Ares’ acquisition of Insight Global will weaken the company’s financial profile and increase lease-adjusted pro forma debt leverage to the mid-6x area,” according to S&P’s report.
However, S&P expects Insight Global’s operating performance to remain good over the “near-to-intermediate” term as demand for IT staffing is growing.
Insight Global, based in Atlanta, ranks as the eighth-largest U.S. information technology staffing firm with estimated IT staffing revenue in the U.S. of $551 million. In addition, it ranks as the 19th-fastest growing staffing firm in the U.S.