LabCorp Acquires Covance for $6.1 Billion
Laboratory Corp of America Holdings, the second largest diagnostic services company in the U.S., said it was acquiring Covance, a contract research organization that provides services for drug development and animal testing, for $6.1 billion in cash and stock.
The move will expand LabCorp’s business into clinical trials, while giving it a larger international presence, the Burlington, N.C.-based company said Monday. The Princeton, N.J.-based Covance helps pharmaceutical companies reduce costs by eliminating in-house laboratories.
“This transaction provides LabCorp with immediate scale and a comprehensive market-leading platform in the $141 billion biopharmaceutical research and development market,” LabCorp chairman and CEO David King said. The move also gives the company new sources of revenue, market access and a nutritional business, he added.
King will remain CEO of the combined companies. Joe Herring, CEO of Covance will run the Covance division from its Princeton headquarters. The combined companies’ headquarters will still be in Burlington, N.C., LabCorp said. The deal is expected to close in early 2015.
This is the latest deal in a competition with LabCorp’s biggest rival, U.S. diagnostic leader Quest Diagnostics. Quest acquired Solstas Lab Partners for $570 million this past January. — Kellen Owings
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