TEXT-S&P rates Thermo Fisher Scientific proposed notes 'A-'
Aug 16 - Standard & Poor's Ratings Services said today that it assigned its 'A-' rating to Waltham, Mass.-based Thermo Fisher Scientific Inc.'s proposed $1.3 billion of senior notes due 2018 and 2023 with amounts and rates to be determined by market conditions. The company will use the proceeds as part of the financing for its acquisition of One Lambda, share repurchases, and general corporate purposes. One Lambda is a privately held transplant diagnostic and research provider. Our A-/Stable/A-2 corporate credit rating on Thermo Fisher reflects a "strong" business risk profile characterized by its diverse presence across geographies and customers, its ability to retain market leadership through organic growth, and successful execution of moderate bolt-on acquisitions that support core business strengths. The intermediate financial risk profile reflects our belief that Thermo Fisher will operate with debt leverage of between 2x and 3x with temporary excursions above 3x. For example, although debt leverage pro forma for the One Lambda acquisition will increase to about 3.2x, we expect this measure to rapidly fall below 3x. The company's decisions to increase its share repurchase program, and to borrow for an acquisition purchased at approximately 9x expected EBITDA, underpin our belief that it will pursue a more shareholder-friendly financial policy than that of the last few years. RELATED CRITERIA AND RESEARCH -- Methodology: Short-Term/Long-Term Ratings Linkage Criteria For Corporate And Sovereign Issuers, May 15, 2012 -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008 -- 2008 Corporate Criteria: Ratios And Adjustments, April 15, 2008 -- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008 RATING LIST Thermo Fisher Scientific Inc. Corporate credit rating A-/Stable/A-2 Rating Assigned $1.3 bil. sr notes due 2018, 2023 A- Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
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