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Fitch Affirms PerkinElmer Ratings, Saying Outlook is Stable

NEW YORK (GenomeWeb News) – Fitch Ratings today affirmed PerkinElmer's ratings, saying the Waltham, Mass.-based firm's rating outlook is Stable.

The ratings agency gave PerkinElmer BBB- ratings to its Issuer Default Rating, senior unsecured debt, and senior unsecured bank loan.

As a result of incremental debt funding related to PerkinElmer's purchase of Caliper Life Sciences last year, the company has experienced higher gross debt leverage and has been less active on the M&A front, Fitch said. Once PerkinElmer's debt leverage is reduced to 2.5x, the level before it bought Caliper, though, Fitch expects the firm to continue bolt-on acquisitions at a pace similar to 2009 and 2010.

In those two years, PerkinElmer disclosed five acquisitions, and in 2011 the company purchased seven companies.

It added that PerkinElmer management will be focused on debt repayment "in order to keep leverage at a level indicative of the present rating," and Fitch projects the firm's leverage to stay at the current 2.7x level at the end of 2012, but that it will fall to 2.2x at the end of 2013 as PerkinElmer pays down its outstanding bank debt.

Fitch added that the company has expanded margins in the first half of this year "providing testament to the company's efforts to lower operating costs through restructuring initiatives, including shifting manufacturing to low-cost regions and consolidating back office functions."

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