Announcement: Moody's says House of HR's ratings are unaffected by Term Loan B add-onGlobal Credit Research - 25 Jan 2022Paris, January 25, 2022 -- Moody's Investors Service ("Moody's") said House of Finance N.V. (The)'s proposed E150 million add-on to its guaranteed senior secured Term Loan B due in July 2026 does not affect its B2 ratings including the B2 guaranteed senior secured global notes rating and the B2 guaranteed senior secured revolving credit facility rating. Concurrently, House of HR NV's (House of HR or the company) B2 corporate family rating (CFR), B2-PD probability of default rating (PDR) and Caa1 rating on its guaranteed senior subordinate debt remain unchanged as well. The outlook for both issuers is stable.The debt proceeds along with E82 million of cash on balance sheet and E25 million equity contribution from the shareholder Naxicap Partners will be used to fund two acquisitions and pay related transaction costs.While the proposed transaction has no impact on the company's gross leverage, Moody's notes that House of HR has been highly acquisitive in the last two years, prompting the company to raise E200 million of guaranteed senior subordinate notes to fund acquisitions in December 2020. The company has a track record of successfully integrating acquisitions, which supports its credit profile.Moody's expects House of HR will improve its leverage from 5.2x following the closing of the transaction to 4.6x by 2023, while free cash flow (FCF) to debt is expected to be above 5%.Following the transaction, liquidity will remain good with E115 million of cash on balance sheet, and given the guaranteed senior secured revolving credit facility (RCF) will be upsized by E15 million to E110 million. Moody's also expects FCF generation will be around E75-80 million per year over the next two years.One of the acquisitions, Solcom, is a contracting service company specializing in the IT and engineering sectors that will act as a facilitator of sales and marketing for House of HR. Solcom is expected to generate E172 million in revenue and E20 million in EBITDA in 2021.The other target is a Dutch leader in providing healthcare related staffing and recruitment services which will provide House of HR a platform to increase its presence in the European care staffing market. The target is expected to generate E98 million in revenue and E10 million in EBITDA in 2021.Both acquisitions are in line with House of HR's strategy to increase its footprint in Germany, Benelux, Nordics and France through acquisitions in high growth sectors with good profitability and scale.COMPANY PROFILEHouse of HR NV (House of HR) is a Belgium-based provider of human resource solutions with a focus on SMEs. The company predominantly operates in Belgium, the Netherlands, Germany and France, and serves two segments: (1) Specialized Talent Solutions - general temporary and permanent staffing services of candidates with technical profiles and (2) Engineering and Consulting (EC) - secondment of engineers and highly skilled technicians, consultants and lawyers. Proforma the transaction, the company expects to report revenue of E2,447 million and company adjusted EBITDA of E293 million for December 2021.The French private equity firm Naxicap Partners owns 48% of the company while the remaining is owned by the co-founder and management.This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. 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