NEW YORK (GenomeWeb News) – Fitch Ratings today affirmed its 'BBB' issuer default rating with a stable outlook on Life Technologies.
The New York-based ratings firm said that the rating is supported by a general declining trend in Life Tech's debt leverage over the past three years. It noted that the reduction in leverage is due to a combination of stable operating performance and use of cash for debt reduction.
As of Sept. 30, 2011, Life Tech's leverage was 2.4x, a "substantial" decline from around 3.5x following the merger of Applied Biosystems and Invitrogen to form Life Tech, Fitch said in a statement.
Fitch said that it expects Life Tech's total debt to decline further during this quarter due to a planned redemption of $450 million convertible notes due 2024.
Fitch also noted in its statement recent consolidation activity in the genomics tools field and said that it believes Life Tech may increase its M&A activity in 2012. "Maintenance of the 'BBB' IDR for Life Technologies contemplates debt-to-EBITDA maintained between 2.0x and 2.5x in the near to medium term, although periodic increases to fund acquisitions could be tolerated within the current rating category," the ratings firm said.