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Rating Action: Moody's changes Laird's outlook to positive, affirms B3 Corporate Family RatingGlobal Credit Research - 15 Mar 2021Frankfurt am Main, March 15, 2021 -- Moody's Investors Service ("Moody's") has today affirmed the B3 corporate family rating (CFR) and the B3-PD probability of default rating (PDR) of AI Ladder (Luxembourg) Subco S.a r.l (Laird). Concurrently Moody's has affirmed the B2 ratings of the company's $750 million ($424 million outstanding) equivalent backed senior secured first lien term loan B and its $133 million backed senior secured revolving credit facility (RCF). The outlook has been changed to positive from negative.The outlook change to positive reflects the announcement that DuPont de Nemours, Inc. (DuPont, Baa1 stable) has entered into a definitive agreement with Advent International, to acquire Laird's Performance Materials business for an enterprise value of $2.3 billion. Based on LTM September 2020, the Performance Materials business contributed approx. 80% to Laird's total EBITDA. The transaction is expected to close in the third quarter of 2021, subject to regulatory approvals and other customary closing conditions. Following the acquisition, Laird's business activities will consist of the Connectivity as well as Thermal Systems divisions.RATINGS RATIONALEThe proposed disposal of the Performance Materials business is credit positive as Moody's expects the financial debt to be repaid upon completion of the proposed transaction. This would basically leave Laird free of financial debt.The positive outlook reflects the opportunity for an upgrade if the sale of its Performance Materials business is successfully executed, Laird repays its financial debt as expected and the remaining business will continue to be free cash flow generative. However, positive rating pressure depends on Laird's longer term business profile following the disposal of the materials businessFACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGSDownward pressure could be exerted on the rating in the event of weak operating performance of the remaining activities and procurement of new financial debt material to the remaining activities leading to an elevated leverage level. Likewise, a negative rating action would be considered in case the liquidity position deteriorates.Upward rating pressure could arise if a successful closing of the proposed transaction leads to a basically debt-free capital structure, Laird's remaining activities continue to be free cash flow generative and liquidity remains strong.ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONSMoody's takes into account the impact of environmental, social and governance (ESG) factors when assessing companies' credit quality. Laird's ratings factor in its current private equity ownership, illustrated by its high financial leverage pre closing of the proposed transaction.PRINCIPLE METHODOLOGYThe principal methodology used in these ratings was Manufacturing Methodology published in March 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1206079. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.PROFILEAI Ladder (Luxembourg) Subco S.a r.l operating under the trade name Laird (Laird) is a global engineering technology company which generated revenue of $659 million in LTM September 2020. Following the acquisition by Advent International the organisation has been re-structured into three businesses which are run autonomously by their respective management boards: (1) performance materials, which accounted for approx. three-quarters of pro forma group revenue, has the number one market position in customized components that protect smart devices from electromagnetic interferences and heat; (2) connectivity, which represented less than one-fifth of pro forma revenue, provides wireless opportunities for customers to connect electronics with security and confidence through antennas, wireless modules and IoT (internet of things) platforms; and (3) thermal systems, which represented about one-tenth of the business in terms of revenue, with commercial applications in active thermal management.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. 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