"When we made the decision not to sell our fluid sciences business, we understood the potential effect on our credit rating," says chairman and CEO
PerkinElmer commented that Moody's decision to reduce its credit rating from Baa3 with negative outlook to Ba2 with stable outlook was anticipated in the refinancing programme announced on 29 October, including the commitment of up to $445 million from Merrill Lynch.
"When we made the decision not to sell our fluid sciences business, we understood the potential effect on our credit rating," said Gregory Summe, chairman and CEO of PerkinElmer.
"We believe retaining fluid sciences until the markets improve is the best path to improve shareholder value over the long term.
We factored the cost implications of a ratings downgrade into our financing, and this should not affect our long-term financial strategy." On 29 October, PerkinElmer reported that it had received a commitment from Merrill Lynch Capital to provide a senior secured credit facility of up to $445 million, including a revolving credit facility of $100 million.
The company intends to use these facilities to repay existing debt, thereby extending existing shorter-term debt maturities.
As part of Moody's announcement, the credit outlook for PerkinElmer was improved to stable from negative. "Our Q3 earnings were on target, supported by substantial progress made in cash flow and debt reduction," said Summe. "We continue to further reduce our cost structure across all of our businesses, including combining our life sciences and analytical instruments businesses into a new life and analytical sciences business unit.
Our business is trending positively, and we are building momentum."
