LabCorp Acquires Covance In $6.1B Deal
By C. Rajan, contributing writer
Medical diagnostics giant, LabCorp, has announced that it will acquire leading drug discovery CRO Covance in a $6.1 billion cash and stock deal, a move that will plant LabCorp firmly in the R&D and clinical trial space.
The two companies said their combination will create the world's leading healthcare diagnostics company, with LabCorp's expertise in medical testing and Covance's market-leading position in contract research. The deal is expected to close in the first quarter of 2015, subject to Covance shareholders’ approval and regulatory approvals.
North Carolina based LabCorp (Laboratory Corporation of America Holdings) said the new combined company would improve patient recruitment for trials, in turn making clinical research and data delivery to sponsors more efficient. Together, the two companies will be capable of providing full-service drug development services to present and future partners in the industry.
LabCorp’s base in Burlington, NC will be the company’s new headquarters, while the Covance division will continue to operate from Princeton, NJ under the Covance brand.
Joe Herring, Chairman and CEO Covance said, "Covance generates more safety and efficacy data for the approval of innovative medicines than any other company in the world, and LabCorp has longitudinal diagnostic data from more than 75 million patients. This combination leads the way to more cost-effective healthcare by improving the safety and efficacy of drug therapies, enabling accurate patient diagnostics, and advancing evidence-based medicines which will enable our clients to substantiate the value of their products and services to patients and payors. The result will be improved health outcomes and reduced treatment costs.”
The combination of LabCorp and Covance opens up new channels for business and revenue — especially for LabCorp, which says that the acquisition places the company firmly in the $141 billion biopharmaceutical research & development market and increases its international presence.
LabCorp Chairman and CEO David King commented, “By joining our highly compatible and complementary capabilities, the combined company will be an industry leader in both the laboratory and CRO spaces, characterized by global scale, enhanced offerings, new efficiencies, broader and deeper customer relationships, and a differentiated business model."