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Moody's to review Riverdeep arm
Leading credit ratings agency Moody's has placed its rating on a HM Riverdeep affiliate on review for a possible downgrade on news this week that the group has agreed to a $4bn (€2.9bn) takeover of Reed Elsevier's US education arm Harcourt, reports the Irish Independent.
Moody's currently has a B3 rating on Riverdeep Interactive Learning USA, six notches below investment-grade status. "The review reflects Moody's concerns that the incremental debt and costs to achieve synergies will delay the previous expected decline in leverage," said Moody's.
One analyst calculates that the group's debt mountain will amount to about $7.4bn following the $4bn acquisition of Harcourt. With total equity in HM Riverdeep of $2.6bn, this points to an enterprise value of $10bn for the combined businesses.
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