Two debt ratings agencies have given a vote of confidence in Echo Global Logistics’ recent acquisition of ITS Logistics.
Neither Moody’s nor S&P Global Ratings changed their debt rating on Echo Global, which is privately-owned but does have publicly-traded debt. But the outlook on Echo Global from both companies was increased to positive from stable, which can often be a precursor to a ratings increase.
S&P Global’s (NYSE: SPGI) rating remains at B- for the company as a whole. Moody’s affirmed its B3 corporate family rating on Echo Global, which is considered equivalent to the B- rating at S&P Global.
Moody’s (NYSE: MCO) did downgrade one debt issue, but the move is more technical in nature, made necessary by a change in the combined company’s capital structure.
“We believe the acquisition will slightly improve (Echo’s) credit metrics based on ITS’ EBITDA contribution (and a somewhat favorable funding mix in our opinion), offsetting Echo’s slightly weaker-than-expected recent performance,” S&P said in its report on the affirmation of the rating.
Both ratings agencies saw improvement in both the debt-to-EBITDA ratio and projected free cash flows at Echo Global after the ITS acquisition.
The S&P Global analysis said it sees the ratio at Echo Global to sink to the “low 6X area” in the next 12 months. The combined company would have had a 2025 ratio of 6.8X, while Echo’s standalone leverage in 2025 was about 7.1X, according to S&P Global estimates.
The improvement in the ratio, S&P said, will come from “recent business wins at ITS and the full-year contribution from Echo’s August 2025 acquisition of Freightsaver.” That company is a California-based 3PL.
Improved EBITDA at Echo
The EBITDA part of that ratio, according to S&P Global, is that it sees that figure rising by $114 million based on the agency’s estimates, “meaningfully expanding the company’s pre-acquisition S&P Global Ratings-adjusted EBITDA (which was) estimated at about $133 million for 2025.”
The agency has what it said was a “cautious view” of ITS “because a majority of revenue is exposed to consumer-related end markets.”
“Echo will get to diversify its customer end market from ITS’ large high-volume e-commerce and Consumer & Retail segments, in contrast to Echo’s small and medium customers in the Manufacturing and Wholesale segments having transactional live-freight shipping requirements,” S&P Global said.
The ratings agencies do not generally disclose revenue and profitability numbers in their reports, but some data does occasionally see the light of day in their analyses.
