In July 2018, private equity firm Blackstone acquired France-based 
storage system manufacturer Financiere EFEL SAS from Equistone Partners 
Europe.
We are therefore assigning our 'B' long-term rating to Optimus Bidco, the 
new holding company of Financiere EFEL and Averys SA, the group's main 
operating entity.
The stable outlook reflects our view that Averys/Optimus will continue 
deleveraging, with debt to EBITDA below 6.0x expected at year-end 2019, 
as well as funds from operations cash interest coverage comfortably above 
2.5x.

PARIS (S&P Global Ratings) Oct. 30, 2018--S&P Global Ratings today assigned 
its 'B' long-term issuer credit rating to Optimus Bidco SAS, holding company 
of France-based storage system manufacturer Financiere EFEL SAS, and Averys 
SA, the group's main operating entity. The outlook is stable.

We also withdrew our 'B' issuer credit rating on Financiere EFEL SAS, the 
former holding company of Averys. 

At the same time, we assigned our 'B' issue rating to the €400 million 
first-lien term loan issued by Optimus Bidco (Euribor +3.75). The recovery 
rating on the debt is '3', indicating our expectation of average recovery 
(50%-70%; rounded estimate: 60%) in the event of a default. 

We also assigned our 'CCC+' issue rating to the €85 million second-lien term 
loan issued by Optimus Bidco (Euribor +8.25%). The recovery rating is '6', 
indicating our expectation of zero recovery in the event of a payment default. 

The ratings are in line with the preliminary ratings we assigned on July 30, 
2018 (see "Optimus Bidco, Holding Company Of France-Based Financiere EFEL And 
Averys, Rated 'B' (Prelim); Outlook Stable" published on RatingsDirect). The 
final documentation does not depart materially from what we reviewed in July. 
The issue amount was in line with the figure proposed, and the achieved 
interest rate was slightly higher than we expected, albeit in line with our 
assessment of the group's financial risk profile and the current rating.

Averys/Optimus is a European leader in the manufacture of storage systems 
(heavy and light duty racking) and metal furniture for numerous applications 
in industrial warehouses. Headquartered in France, the group operates through 
11 industrial sites in Europe and in 13 countries across Europe, the Middle 
East, and Asia-Pacific, through a portfolio of five brands. Our rating 
reflects our view that Averys/Optimus benefits from the distribution network 
of Storax, the leading Southern European manufacturer racking products, which 
it acquired in 2017. The acquisition has allowed the group to access the 
Spanish and Portuguese storage racking products market, with further potential 
to penetrate new markets and expand its geographic footprint. Including 
Storax, Averys/Optimus generated sales of about €304 million and EBITDA of €39 
million for the first half of 2018. We expect the combined group will generate 
sales of €640 million and EBITDA of €80 million in 2018 on a pro-forma basis. 

We assess Averys/Optimus' business risk profile as weak because it is 
constrained by the limited scale, scope, and diversification of its operations 
compared with that of other capital goods sector companies. The group has 
addressed its geographic concentration over the past 10 years by acquiring 
Standard in Turkey, and Stow International N.V. across Europe. The integration 
of Storax reduced the importance of revenue generation in France (about 35%), 
but Europe still accounts for 90% of the group's revenue base. We also view 
the market for racking storage products as fragmented and competitive, which 
is a further constraining factor.

We positively view Averys/Optimus' solid market shares in its core geographic 
markets (38% in France and 42% in Belgium) translating into its No.1 position 
as a storage solution provider in Europe and a No.3 position globally. 
Furthermore, on the strength of its leading market position, Averys/Optimus 
has maintained long-term relationships with a fairly wide range of customers 
from original equipment manufacturers such as forklift companies, to 
E-retailers and traditional retailers, with no contract losses. While its 
top-10 customers account for less than 30% of its sales, the group remains 
somewhat exposed to its relationships with its largest industrial customers. 
We also view positively the group's variable cost structure, which has 
historically enabled the group to deliver an EBITDA margin of 10%-12% through 
the cycle. At the end of fiscal year 2017 (fiscal year ended Dec. 31), we 
estimate a S&P Global Ratings-adjusted EBITDA margin of 12.2%.

In July 2018, private equity firm Blackstone acquired Financiere EFEL from 
Equistone Partners Europe. The group's private-equity ownership by a financial 
sponsor constrains our financial risk profile assessment. We expect that 
Averys/Optimus' S&P Global Ratings-adjusted debt-to-EBITDA ratio will be 6.2x 
in 2018, reducing to below 5.7x from 2019. Our adjusted debt includes €5 
million in pension liabilities and about €18 million of operating leases, 
resulting in a total debt of about €509 million for 2018. 

The financial risk profile is, however, supported by our expectation of 
moderate volatility in Averys/Optimus' operating cash flow, and our 
expectation that Averys/Optimus will be able to continue generating positive 
free operating cash flow (FOCF) under our base case, and maintain healthy cash 
interest-coverage ratios above 2.5x in 2018 and 2019. Our financial risk 
profile assessment also incorporates our expectation of the group's adequate 
liquidity in the next 12 months.

The stable outlook reflects our expectation that Averys/Optimus will expand 
organically and will likely generate positive FOCF over 2018-2019. We base 
this view on our assumption that the group will be able to execute on its 
increased order backlog, leading to a stronger operating performance than in 
the past 12 months, and an EBITDA margin of 12%-13%. We estimate reported 
adjusted debt to EBITDA of below 6.0x at year-end 2019 and FFO to cash 
interest coverage comfortably more than 2.5x by year-end 2018, as well as 
adequate liquidity.

We could lower the rating if the company lost a major customer contract, or if 
the anticipated growth did not materialize due to a sharp downturn in the 
global economy, leading to lower revenues and EBITDA, and a contraction in 
operating cash flow generation compared with our base case. A more aggressive 
financial policy, for example in the form of shareholder distributions, or 
deteriorating liquidity could also put the rating under pressure. Likewise, 
FFO cash interest coverage converging toward less than 2.5x, or adjusted debt 
to EBITDA not improving into 2019 to below 6.0x, or less-than-adequate 
liquidity would likely trigger a negative rating action.

Given the company's small absolute size, we see an upgrade as remote. Any 
positive rating action would require:

Further significant diversification; 
The company outperforming our base-case projections, with the EBITDA 
margin improving sustainably; and 
Demonstration of a supportive financial policy, such as a constant 
deleveraging path combined with a lack of further returns to 
shareholders. 

This is unlikely over the next 12 months, in our view.

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Certain terms used in this report, particularly certain adjectives used to 
express our view on rating relevant factors, have specific meanings ascribed 
to them in our criteria, and should therefore be read in conjunction with such 
criteria. Please see Ratings Criteria at www.standardandpoors.com for further 
information. Complete ratings information is available to subscribers of 
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