S&P Global Ratings revised TTM Technologies Inc.'s outlook to stable from positive following the company's planned $1.1 billion acquisition of Epiq Solutions, while affirming the printed circuit board maker's 'BB' credit rating.
The acquisition, expected to close in the fourth quarter of 2026, will be financed primarily through debt, increasing TTM's leverage in the near term. The deal marks the third major transaction in recent months, reversing a multi-year pause in large-scale purchases that had lasted since 2022.
S&P projects pro forma leverage for TTM to rise to the mid-2x range upon completion of the acquisition, up from the low-1x range projected for 2025. Leverage is then expected to decline in 2027, supported by strong demand for artificial intelligence data center infrastructure and improved EBITDA margins, which should return leverage to the mid-1x range by year-end.
Revenue growth is forecast at nearly 50% in 2026, followed by mid-double-digit expansion in 2027. Free operating cash flow is projected to remain under pressure in 2026 due to elevated capital expenditures, which are expected to exceed $370 million, and higher working capital requirements, resulting in modestly negative free cash flow for the year. In 2027, improved EBITDA margins near 20% are anticipated to drive free cash flow generation of over $250 million.
S&P indicated that a downgrade could occur if further debt-funded acquisitions or weakening end-market demand sustain leverage above 3x. Conversely, an upgrade would be possible if TTM maintains adjusted net leverage below 2x, generates free operating cash flow-to-debt of around 15%, and expands organic revenue within core markets.
