2. >>Business Strategy

On the Verge of a Deal for Dade Behring

A year ago, Dade Behring, the nation's sixth largest diagnostics company, was facing a huge debt and very angry debt holders. Now, the company seems close to a deal that would allow it to cut the debt in half (to about $750 million) and give debtholders full ownership of Dade Behring. The company would file a voluntary pre-packaged bankruptcy in federal court, which would also enable it to start trading securities on the public equities market. Nothing is finalized, but sources say the company is confident it will prevail. Meanwhile, its financial performance is picking up, with strong growth in all core product lines.

A year ago, Dade Behring Inc. 's financial situation looked bleak: the nation's sixth largest diagnostics company, with revenues of $1.18 billion, was staggering under a debt of more than $1.5 billion. (See "Dade Behring's Recap Plans," IN VIVO, July 2001 Also see "Dade Behring's Recap Plans" - In Vivo, 1 July, 2001..) But no one could agree on a way to restructure the company. The banks were playing hardball by not letting Dade Behring make interest payments to the bond holders, who in turn were furious as they watched the value of senior subordinated debt plummet to less than 90% discount to par.

Meanwhile, the company's owners were trying to sell it whole or in pieces at valuations many considered unrealistic. Rumors were rampant. It seemed that a plan, begun nearly six years...

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