Fitch cuts Beckman Coulter to BBB

Fitch Ratings said it downgraded Beckman Coulter, Inc.'s issuer default, senior unsecured debt and bank loan ratings to BBB from BBB+ in light of financing associated with the proposed acquisition of privately held Lumigen, Inc.

The outlook was changed to stable from negative.

The agency said Beckman Coulter's credit profile, which has already been constrained by a shift in customer leasing policy and shareholder friendly actions, will be further compromised by the increase in leverage necessary to complete the proposed acquisition of Lumigen for $185 million in cash. The new ratings affords some flexibility while the company mitigates the negative impact to free cash flow generation through the intermediate term from a significant cash outlay dedicated to capitalizing customer equipment on the balance sheet resulting from the shift to operating-type leases from sales-type leases in the United States.

Fitch said it recognizes Beckman Coulter's efforts to expand margins with the vertical integration of its chemiluminescent raw material supplier, Lumigen. Lumigen, which had sales of $33 million and an EBITDA margin of 50% in 2005, will modestly improve margins in 2007 and beyond. The transaction is expected to be completed by Nov. 1.

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