Amend: Fitch Affirms Dade Behring Holdings's IDR at 'BBB'.

CHICAGO -- (This is a correction for a message issued on April 2, 2007. It amends information in the second paragraph and second to last paragraph.)

Fitch Ratings has affirmed Dade Behring Holdings Inc.'s (Dade Behring) 'BBB' Issuer Default Rating (IDR), unsecured bank loan and unsecured debt ratings. The ratings apply to approximately $509.8 million of debt. The Rating Outlook is Stable.

Dade Behring's business is characterized by slow, steady top-line growth and an annuity of cash flows provided by after-market product sales bound by long-term contacts (typically 5 years). Overall sales grew 4.9% in 2006, at the upper-end of the industry long-term growth rate of 3-5%, despite the biennial reimbursement reductions in Japan and pricing pressure in Europe, most notably in Germany and France. The company's product mix is heavily weighted toward higher-margin after-market products (reagents, operating supplies, operating-type leases and services) as sales of these products represented greater than 91% of total company revenues in 2006.

Dade Behring is committed to R&D and is expected to devote 8.5%-9.5% of total revenues to its program through 2009. In 2006, the company invested $160.7 million, or 9.2% of total sales, on its R&D projects, including new instrument platforms, test menu expansion, and software upgrades. Significant efforts are directed toward expanding the test menu and software upgrades for the Dimension Vista platform, currently being released in the U.S. in a controlled commercialization strategy. The company's maturing hemostasis instrument platform is anticipated to be refreshed in the intermediate-term with the market introduction of a series of next generation coagulation analyzers, Cobra.

Dade Behring's EBITDA margin compressed in 2006 as the company faced reimbursement challenges and incremental costs for the Dimension Vista market roll-out. Fitch expects further margin pressure in 2007, but expansion thereafter resulting from accelerated revenue growth and progress towards the company's 5-year targets. Free cash flow for 2006 was $127 million (cash flow from operations of $318.9 million less capital spending of $174.7 million and dividends of $17.2 million), the fourth consecutive year the total exceeded $100 million. Fitch anticipates that annual free cash flow greater than $100 million will be sustained in the intermediate-term.

Leverage has increased since last year as total debt currently hovers around $500 million. Adjusted debt including lease receivables sales, foreign guarantees and operating leases yields total adjusted debt leverage of 2.3 times (x) versus gross debt leverage of 1.3x at the end of 2006. Fitch estimates that leverage will remain stable from steady operational performance supported by new product commercialization, most notably the Dimension Vista analyzer, somewhat offset by incremental costs associated with new product launches.

Dade Behring has favored shareholders since the company recapitalized in 2005 as shown by the initiation of a modest dividend and an aggressive share purchase program hence. The company repurchased nearly $405 million of common shares in the past two years representing approximately 11% of outstanding shares. Fitch expects Dade Behring to continue to aggressively repurchase common shares. The company typically in-licenses technologies to boost its R&D program and no significant acquisition activity is anticipated. However, management has stated that the company may take part of the recent industry consolidation to change the current scale of the company, which may include a large opportunity.

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.