Moody's affirmed Bio-Rad Laboratories Inc.'s Baa3 senior unsecured rating and revised the outlook to positive from stable.
The rating agency changed the outlook to positive as it anticipates the continuous improvement of Bio-Rad's earnings and cash flow following its large information systems upgrade and business restructuring activities aimed to reduce cost.
Moody's said the affirmation of the company's Baa3 senior unsecured ratings shows its belief that the life sciences company will keep operating with its conservative financial policies, which helped establish a strong capital structure as shown by cash and short-term investments in excess of funded debt.
However, the agency noted that the ratings were affected by its expectations that the company will acquire early-stage companies with no earnings and need additional investment. According to Moody's, though they will contribute to the company's growth over the long-run, these transactions will hinder Bio-Rad's margins and cash flow in the short-term.
Hercules, Calif.-based Bio-Rad Laboratories offers its solutions to the life science and clinical diagnostics market.