NEW YORK – Fitch Ratings has assigned a ‘BBB-‘ rating to Life Technology Corp.’s proposed $600 million unsecured notes. Fitch anticipates that proceeds of the notes offering will be used to refinance existing debt as well as for other general corporate purposes.

Fitch currently rates Life Technologies as follows:

–Issuer Default Rating (IDR) ‘BBB-‘;

–Senior convertible notes ‘BBB-‘;

–Senior unsecured notes ‘BBB-‘;

–Senior unsecured credit facility ‘BBB-‘.

The Rating Outlook is Stable. The ratings apply to approximately $2.3 billion of debt outstanding at Sept. 30, 2010.

LEVERAGE HAS RECENTLY DECLINED BUT WILL INCREASE PRO FORMA FOR THE PROPOSED NOTES ISSUANCE:

Fitch recognizes the company’s recent decline in debt leverage, which was driven by a combination of stable operating performance, significant progress in integrating the 2008 Applied Biosystems, Inc. (ABI) acquisition and use of cash for debt reduction. Leverage (total debt to EBITDA) at Sept. 30, 2010 was 2.0 times (x), a substantial decline from the end of 2008 when leverage was 6.9x. Since the end of 2008, Life Technologies reduced debt by $1.2 billion to $2.3 billion from $3.6 billion using a combination of cash on hand and asset sale proceeds. Over the same period of time EBITDA has expanded by $618 million to $1.1 billion from $521 million. Recent growth in Life Technologies’ EBITDA reflects solid organic sales growth and expanded profitability, partly driven by the successful execution of the ABI integration, which will be mostly complete by the end of 2010 and has resulted in annual run rate synergies of $175 million.

The proposed $600 million notes issuance will increase Life Technologies’ leverage. Based on LTM Sept. 30, 2010 results and pro forma for the notes issuance, debt-to-EBITDA will increase by 0.6x, to 2.6x from 2.0x. However, at a pro forma 2.6x, debt is still significantly reduced from its Dec. 31, 2009 level of 3.3x EBITDA. Maintenance of the ‘BBB-‘ IDR despite the near-term leverage increase is based on Fitch expectation that the company will continue to prioritize use of cash for debt reduction in 2011. The company produces a fairly robust level of free cash flow and has ample cash on hand, so significant debt reduction should be possible even if the company also deploys cash for other initiatives, such as tuck-in acquisitions and share repurchases. Over the longer-term a ‘BBB-‘ IDR will generally require debt-to-EBITDA maintained at or below 2.5x.

STABLE OPERATING PERFORMANCE DESPITE MACRO ECONOMIC HEADWINDS IMPACTING END-USER MARKETS:

Life Technologies maintained strong operating performance in 2010 while facing a weak economy and integrating the ABI acquisition. For the first nine months of 2010 reported sales grew by 10% and 7.5% on an organic basis excluding the contribution of acquisitions and favorable foreign exchange. The company produced EBITDA of $1.1 billion for the Sept. 30, 2010 LTM period, up about $100 million or 9% versus the 2009 level. Growth in EBITDA was achieved due to solid reported sales growth as well as strong expansion of the gross margin, which equaled 59.8% for the first nine months of 2010, up 460 bps from 55.2% in the period year period.

In addition to the recent benefit of the successful ABI integration, Fitch believes that Life Technologies’ financial operating results also reflect the relative resilience of the company’s industry and market position, in particular its focus on life sciences research markets, high-end technologies, and growing market segments. It should be noted however, that there has been some softness in sales to biotechnology and pharmaceutical customers due to capital conservation efforts and consolidation activity in those end-markets. Longer-term, Fitch believes that sustained positive operating performance could be supported by the company’s focus on expanding its presence in leading-edge applications and emerging markets with strong growth potential, such as stem cells, next-generation sequencing and applied markets.

SOLID LIQUIDITY PROFILE WITH RECENTLY IMPROVED CASH FLOWS:

Life Technologies’ solid liquidity is provided by availability on the company’s $500 million credit facility revolver due Nov. 21, 2013 ($484 million available at Sept. 30, 2010 reduced by outstanding letters of credit) and cash on hand ($503 million at Sept. 30, 2010). Free cash flow (FCF, calculated as cash from operations less dividends and capital expenditure) for the LTM period ended Sept. 30, 2010 was a historically high $618 million, representing a very strong 17.5% FCF margin and up $84 million or 16% versus the level of FCF generated in 2009. Strong FCF generation in recent periods is mostly the result of the company’s improved level of profitability. Based on its moderately positive operating Outlook for the company, Fitch expects Life Technologies’ FCF generation to be sustained at $550-$650 million annually.

The company’s debt maturity schedule is not a credit concern. Aside from the currently undrawn credit revolver, debt outstanding at Sept. 30, 2010 includes:

–$250 million senior notes due 2013;

–$500 million senior notes due 2015;

–$750 million senior notes due 2020;

–$450 million convertible senior notes due 2024;

–$350 million convertible senior notes due 2025.

In February 2010, the company paid down the entire $1.9 billion balance outstanding under its bank credit facility term loans. Following repayment of the term loans, the credit facility consisted of a $250 million revolving credit facility. In May 2010, the company entered into an amendment to the credit facility expanding the capacity of the revolver to $500 million from $250 million. As part of the amendment the previously secured credit facility became an unsecured obligation. The credit facility terms require compliance with financial maintenance covenants, including maintenance of debt-to-EBITDA below 3.25x. Assessed pro forma for the proposed $800 million notes issuance, the company has ample operating cushion under its bank facility covenants.

GUIDELINES FOR FURTHER RATING ACTIONS:

Maintenance of Life Technologies’ ‘BBB-‘ IDR generally contemplates debt-to-EBITDA maintained between 2.0x and 2.5x in the near to medium term, although periodic increases to fund acquisitions could be tolerated within the current rating category. Maintenance of the IDR post a leveraging acquisition would be based upon Fitch’s assessment of the company’s willingness and ability to reduce leverage to within the 2.0x-2.5x range 12-18 months following the transaction. Although the proposed notes offering will increase leverage to slightly above the 2.0-to-2.5x range in the near term, Fitch expects the company will continue to deploy cash for debt reduction in 2011.

Additional information is available at www.fitchratings.com.

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