While Ramsay Health Care can fund the acquisition of Spire Healthcare via debt it will stretch leverage, Credit Suisse ascertains. This view is formulated subsequent to the announcement Fitch Ratings has placed the company on negative watch post the announcement.
Credit Suisse estimates the company will require $1-1.5bn in capital to remain under those levels of debt that would keep it firmly within an investment grade credit rating as well as provide sufficient flexibility for future investments.
It may also take months before a capital management review is completed and more than 12 months before the UK authority completes its competition review of the acquisition.
Neutral rating with a $70 target price maintained.
Sector: Health Care Equipment & Services.
Target price is $70.00.