Danaher Corp. 'A' Ratings Placed On Watch Negative On Planned Acqusition Of Cepheid

Danaher Corp., a diversified life sciences and technology company, plans to acquire California-based molecular diagnostics developer and manufacturer Cepheid Inc. for $4 billion. We expect the transaction to be funded with debt. Though we expect the transaction to add around $700 million to Danaher's 2017 topline and further broaden its already diverse product portfolio, the initially limited projected EBITDA contribution we expect from the acquisition coupled with the incremental debt will drive leverage well over 2.5x in 2016 and 2017. We are placing our ratings on Danaher, including our 'A' corporate credit rating and 'A-1' commercial paper rating, on CreditWatch with negative implications. The CreditWatch placement reflects our view that the timing of the transaction and the high acquisition multiple

...+ Danaher Corp., a diversified life sciences and technology company, plans to acquire California-based molecular diagnostics developer and manufacturer Cepheid Inc. for $4 billion. We expect the transaction to be funded with debt. + Though we expect the transaction to add around $700 million to Danaher's 2017 topline and further broaden its already diverse product portfolio, the initially limited projected EBITDA contribution we expect from the acquisition coupled with the incremental debt will drive leverage well over 2.5x in 2016 and 2017. + We are placing our ratings on Danaher, including our 'A' corporate credit rating and 'A-1' commercial paper rating, on CreditWatch with negative implications. + The CreditWatch placement reflects our view that the timing of the transaction and the high acquisition multiple may manifest a shift toward a more aggressive financial policy than we previously expected. + We will meet with Danaher's management to further clarify the company's acquisition...

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