(The following statement was released by the rating agency)
Oct 12 - Standard & Poor's Ratings Services today said that its ratings on Gibson Energy ULC (BB-/Stable/--) are unaffected by the company's announcement that it plans to acquire OMNI Energy Services Corp. (not rated) for US$445 million. Gibson has also agreed to sell subscription receipts for gross proceeds of C$350 million to fund the acquisition. It will finance the rest of the acquisition with cash and borrowings under its US$375 million revolving credit facility.
We view this announcement as neutral from a credit perspective; however, we acknowledge that management is financing the acquisition conservatively, because it is funding about 75% (85% if it exercises its 15% over-allotment option) of the acquisition through equity. Although we believe that the OMNI acquisition will improve Gibson's geographic diversity, we believe that it does not improve the company's business risk profile enough to raise our ratings. Pro forma OMNI's 2012 EBITDA, we expect Gibson's debt-to-EBITDA to improve to 2.5x-2.7x from 3.1x as of Jun 30, 2012. Should OMNI's EBITDA be lower than expected, Gibson has adequate cushion under its balance-sheet debt such that credit measures will not weaken if OMNI's EBITDA drops by 50%.