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S&P Rates Danaher Corporate Credit, $300 Million Notes A+

23 September 1998

S&P Rates Danaher Corporate Credit, $300 Million Notes A+; Outlook Stable

    NEW YORK, Sept. 22 -- Standard & Poor's today assigned its
single-'A'-plus corporate credit rating to Danaher Corp. and its
single-'A'-plus rating to the company's $300 million notes due 2028 and
$250 million bank revolving credit facility.  The outlook is stable.
    The bank loan is rated the same as the corporate credit rating.  Since the
facility is unsecured, the banks will fare the same as other senior creditors
in the event of a default.
    Proceeds from the debt issue will be used to repay a substantial portion
of the borrowings incurred to fund the 1998 Pacific Scientific Co.
acquisition.
    The ratings reflect an above-average business profile together with a
sound balance sheet, strong cash flow generation, and a moderately
conservative financial policy.
    Washington, D.C.-based Danaher is a leading domestic manufacturer of
mechanics' hand tools and automotive specialty tools, and it has many strong
niche positions in process and environmental controls.  While the business is
cyclical, factors such as strong brand name recognition, and diversification
by customer, end-markets, and geography, together with a good portion of sales
going to more stable replacement markets, mitigate earnings and cash flow
volatility.  This bodes well for continued good operating performance.  Pretax
return on permanent capital is expected to average about 20% over the economic
cycle.
    Danaher's business plan calls for it to exceed industry growth rates for
existing units, to accelerate international growth, and to expand through
acquisitions.  With efficient operations and minimal dividends, Danaher
generates substantial free cash flow.  Danaher, through a number of
acquisitions, has doubled its size over the past three years while maintaining
a conservatively leveraged balance sheet and strong cash flow protection.
Total debt to capital is expected to be maintained in the 25%-40% range, and
funds from operations to total debt is expected to average between 50%-60%,
appropriate levels for the ratings.

    OUTLOOK: STABLE
    A favorable near-term outlook, limited cyclical exposure, and a very good
financial profile reduce downside ratings risk.  An aggressive growth appetite
resulting in periodic spikes in debt leverage limit upside potential,
Standard & Poor's said. -- CreditWire