LabCorp Completes $1.2-Billion Chiltern Buyout, Boosts CRO
Zacks Investment Research | Sep 04, 2017 08:06AM ET
Laboratory Corporation of America Holdings (NYSE:LH) or LabCorp recently announced the successful closure of the acquisition of Chiltern International Group Limited, a specialty CRO (contract research organization). Earlier, the company had entered into a definitive agreement with Chiltern’s shareholders to purchase the company for an all-cash transaction valued at roughly $1.2 billion.
LabCorp expects Chiltern to generate 2017 revenues of roughly $550 million and adjusted earnings before interest, taxes, depreciation and amortization of around $95 million. Excluding transaction related one-time costs and cost synergies, LabCorp expects this deal to boost adjusted earnings and free cash flow in the first year and help earn cost of capital by the third year.
Post acquisition, Chiltern will form part of LabCorp’s Covance Drug Development segment. Per management, Chiltern will be a major partner serving the top 20 biopharma segments and helping LabCorp focus on the high-growth emerging and mid-market biopharma segments. Per LabCorp, the buyout is expected to strengthen its position in innovative diagnostics and drug development solutions.
We encouragingly note that the new combined entity will have approximately 11,100 employees in the Americas — 7,100 in Europe, the Middle East and Africa, and 2,400 in the Asia Pacific.
LabCorp has been consistently on the headlines owing to the Chiltern buyout deal. Earlier, the company had announced that the Federal Trade Commission (FTC) has granted its request for early termination of the waiting period for Chiltern’s buyout under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).
Moreover, apart from the substantial buyouts like Covance, LabCorp has been consistently enhancing and adding capabilities via strategic mergers. In this regard, the company recently announced plans to acquire the analytical testing services business of ChromaDex Corporation (NASDAQ:CDXC) . The company also announced the renewal and extension of agreement with Interpace Diagnostics Group, Inc. (NASDAQ:IDXG) aimed at boosting its cancer portfolio.
Moreover, over the last three months, LabCorp has been trading above the broader Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.