Fitch Rates Invitrogen Corp. 'BBB-'; Outlook Stable

--Issuer Default Rating (IDR) 'BBB-';

--Senior convertible notes 'BBB-'.

The Rating Outlook is Stable. Fitch has also assigned a 'BBB-' rating to Invitrogen's proposed senior secured credit facilities which will be assumed in conjunction with the merger with Applied Biosystems, Inc. Invitrogen is to be renamed Applied Biosystems, Inc. after the merger is completed. The ratings assume the successful completion of the merger.

Invitrogen's ratings are supported by the company's strong cash flows, leading market position, diversified customer base and low capital expenditure needs. The company operates in a relatively low-risk environment as a result of the recurring nature of the company's sales (over 70% of total revenues will be from consumables and services post-merger), strong customer loyalty, and the nature of its end markets (tied to general healthcare spending and biological research). In addition, Fitch believes there is significant growth potential for the life sciences tools industry in general as well as the company's targeted market segments in particular (such as next-generation DNA sequencing).

Fitch believes the complementary nature of the two companies' product lines will enable the realization of revenue synergies post-merger. Invitrogen will be able to offer more bundled product solutions, including complimentary instruments and reagents, which are increasingly important to life science researchers and applied markets customers. In addition, Fitch believes the company will have the opportunity to leverage existing customer channels (such as Invitrogen's Supply Centers) and complementary research & development projects to drive revenue growth. Facility rationalization, overhead reduction, and consolidation of marketing activities, among other activities, should lead to the realization of cost synergies as well.

Key ratings concerns center on integration risks post-merger as well as the high levels of debt and leverage expected. Integration risks are significant in light of the size of the transaction (Applied Biosystems, Inc. had revenues of $2.2 billion in FY08 compared to $1.4 billion for Invitrogen during the same period). In addition, Fitch expects the company's leverage to be more than 3.5 times (x) on a pro forma basis at the close of the transaction, which is high for the rating category. Fitch's ratings incorporate the expectation that the company will reduce debt over the next 1-2 years to a level more appropriate for the rating category (under 3.0x).

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

SOURCE: Fitch Ratings

Fitch Ratings Lauren Coste, 312-606-2320 (Chicago) Mike Zbinovec, 312-368-3164 (Chicago) Brian Bertsch, 212-908-0549 (Media Relations, New York)