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PerkinElmer Prices €500M Senior Note Offering

NEW YORK (GenomeWeb) – PerkinElmer announced that it has priced an offering of €500 million ($554.2 million) of 1.875 percent senior notes due 2026 at an issue price of 99.118 percent of the principal amount.

The issuance is expected to close on July 19, the company said, and the notes will pay interest on an annual basis.

PerkinElmer plans to use the proceeds to reduce the amounts outstanding under its senior unsecured revolving credit facility and for general corporate purposes.

In turn, Fitch Ratings assigned a BBB rating to the 10-year EUR senior notes offering, and deemed the rating outlook Stable. The ratings apply to $1.1 billion of debt as of March 31, the agency said, adding that PerkinElmer has generally maintained its gross debt between 2.0x and 2.5x, and that it anticipates the company's gross leverage could temporarily exceed 2.5x if it issues incremental debt to finance targeted acquisitions.

The rating agency also believes that PerkinElmer is in a position to acquire other firms. However, if such opportunities are not attractive enough, Fitch noted it's likely the company will prioritize shareholder returns over debt reduction.

Fitch further noted that it anticipates low- to mid-single digit organic revenue growth in 2016 for PerkinElmer, "supported by growing demand in emerging markets and the favorable impact of new products, which should more than offset industry headwinds that include constrained research spending."

The company also has sufficient liquidity, Fitch said. Its debt maturity is manageable and its capital structure is simple, currently consisting of one unsecured debt issuance and bank borrowings under a $700 million revolving credit facility maturing in January 2019.

However, Fitch could downgrade PerkinElmer's ratings if the company's US-generated cash flows decreased to a point where it would be difficult for it to internally fund annual debt servicing requirements from domestic cash generation. "Operational weakness could stem from lower-than-anticipated results due to poorer-than-expected sales performance if the company's diversified portfolio cannot withstand headwinds of capital expenditure constraints and tightened global research spending," Fitch added.