Moody's rates Bio-Rad notes Ba3

Moody's Investors Service said it assigned a rating of Ba3 to Bio-Rad Laboratories' $200 million senior unsecured subordinated notes due 2014 and changed the outlook to stable from positive.

Moody's also affirmed Bio-Rad Laboratories' senior implied rating and senior unsecured rating, both at Ba2, and $225 million senior unsecured subordinated notes due 2013 at Ba3.

According to Moody's, the ratings assignment includes the risk of integrating current and future acquisitions, competition from larger manufacturers that have greater resources and less leverage than the company, continued exposure to foreign currency fluctuations, control of the company and the board by the founding family, pricing pressures in the BSE market, which is resulting in contracting Life Sciences and company-wide gross margins, and dependence on government funding for some of the Life Sciences customers. The rating also considers the increased risk of litigation with the recent acquisition of MJ Research Inc.

Factors mitigating these concerns, Moody's said, include broad customer, product and geographic diversification, a high recurring base of revenues that accounts for 70% of total revenues, strong product leadership and market share in both the Life Science and Clinical Diagnostic divisions, and a strategy of focusing on the higher growth, less competitive specialty clinical diagnostic markets.

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