Research: Rating Action: Moody’s assigns a B2 rating to Rovensa’s additional term loan


Stockholm, September 15, 2022 — Moody’s Investors Service (“Moody’s”) has assigned a B2 rating to the €387 million equivalent additional secured term loan offered by Root Bidco Sarl (Rovensa or the Company). The existing senior secured revolving credit line (RCF) of €115 million was increased by an add-on of €50 million. All other ratings, including the Corporate Family (CFR) B2 rating, B2-PD probability of default rating and B2 ratings on existing senior secured credit facilities remain unchanged. The outlook is stable.

Rovensa will use the proceeds from the additional term loan to finance the acquisition of Cosmocel (announced in May), a Mexican producer of biostimulants, and pay transaction-related costs. Additional funding sources include capital contribution from its private equity shareholders and renewed equity from Cosmocel shareholders.


Based on the company’s preliminary results, Moody’s estimates that Rovensa’s gross debt for the last 12 months ended June 2022, on a pro forma basis, will increase from approximately 6x to approximately 7x on an individual basis, which weakly positions the company in the current rating category. The contemplated transaction will delay the deleveraging trajectory compared to Moody’s previous estimates.

Moody’s estimates that the company’s gross debt may fall towards 6x over a forward-looking 18 months period based on organic volume growth, but any additional debt-financed acquisitions could further delay the debt reduction trajectory. , weaken credit quality and increase negative pressure on the current. Evaluation.

The acquisition of Cosmocel strengthens Rovensa’s business and is part of its strategy to expand its commercial exposure to biosolutions products, which benefit from greater growth prospects, higher margins and cash generation. superior compared to its off-patent phytosanitary products. With this acquisition, Rovensa will become the largest manufacturer of biosolutions products and reduce its commercial exposure to Iberian agricultural markets.

More generally, Rovensa’s B2 rating continues to be supported by its adequate liquidity, its focus on sustainable agricultural products which show above-average growth and profitability rates, and its well-established position in the Iberian non-patent crop protection. Rovensa’s credit profile also reflects its strong focus on high value-added specialty crops (e.g. fruit and vegetables), supported by a good track record in innovation and strong know-how in formulation and recording.

Rovensa’s high pro forma gross leverage, relatively small scale of operations compared to R&D-led crop science companies, and certain risks associated with other debt-financed acquisitions limit the rating. In addition, the company’s results are exposed to the risk of adverse weather conditions, such as droughts or floods, in its main markets.


Moody’s considers Rovensa’s liquidity profile to be adequate, supported by an estimated pro forma cash balance of approximately €43 million at end-June 2022. In addition, the company has access to committed RCF, including €28 million euros were drawn. The company increased its committed RCF to €165 million from €115 million as part of the transaction. Combined with the expected operating funds over the next 12 months, the sources will be sufficient to meet its working capital requirements, capital expenditures and short-term debt.


The proposed additional senior secured term loan ranks pari passu with the existing senior secured term loan B2 and the RCF. The senior secured lines benefit from guarantors representing at least 80% of the group’s consolidated EBITDA, subject to certain limitations and excluding certain jurisdictions as part of the definition of the guarantor coverage test. However, the effective coverage of the guarantors as a percentage of consolidated EBITDA, all jurisdictions included, is significantly lower because the majority of the subsidiaries acquired are not guarantors and are located in jurisdictions that are not eligible according to the definition of the guarantor coverage.


Moody’s would consider a rating upgrade, although unlikely at this stage, in the context of significant further expansion of Rovensa’s revenue base, as well as EBITDA growth, which would allow the group to use substantial FCF to reduce its debt, so that its revenue adjusted by Moody’s total debt/EBITDA is trending towards 4.0x on a sustained basis.

Rovensa’s ratings could come under negative pressure if the company fails to sustainably reduce its Moody’s adjusted gross leverage towards 6.0x or if the group generates a sustained negative FCF or in the event of any other deterioration in its liquidity profile.

The main methodology used in this rating is Chemistry published in June 2022 and available at Otherwise, please see the Scoring Methodologies page on for a copy of this methodology.


With dual headquarters in Madrid, Spain and Lisbon, Portugal, Root Bidco Sarl (Rovensa) provides crop life cycle management solutions, including bionutrition, biological control and off-patent CP products, with particular emphasis on high-value cash crops, such as fruits. or plant products. Pro forma for the acquisition of Cosmocel, the company generated revenue and adjusted EBITDA of approximately €667 million and €172 million, respectively, in fiscal 2022. As of June 2020 , Partners Group acquired a significant stake in Rovensa from Bridgepoint, which remains a shareholder of Rovensa.


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Frederic Massard
Corporate Finance Group
Moody’s Investors Service (Nordics) AB
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Karen Berckmann, CFA
Associate General Manager
Corporate Finance Group
JOURNALISTS: 44 20 7772 5456
Customer service: 44 20 7772 5454

Release Office:
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