fbpx

LabCorp and Envigo Sign Innovative Agreement to Expand Covance’s Nonclinical Drug Development Capabilities and Create an Independent Research Models Provider

  • LabCorp will purchase Envigo’s nonclinical contract research
    services business, expanding the global reach and capabilities of
    Covance’s nonclinical drug development business
  • Envigo’s research models and services business will purchase
    Covance’s research products business located in the United States,
    combining two complementary businesses into a new comprehensive
    research models and services company
  • Covance and the new Envigo research models and services entity will
    enter into a multi-year renewable supply agreement

BURLINGTON, N.C. & EAST MILLSTONE, N.J.–(BUSINESS WIRE)–LabCorp® (NYSE: LH), a leading global life sciences company that is
deeply integrated in guiding patient care, and Envigo, a leading
provider of nonclinical contract research services and research models,
today announced that LabCorp’s Covance Drug Development segment will
acquire Envigo’s nonclinical research services business and Envigo’s
Research Models Services business will acquire the Covance Research
Products business. This will result in Envigo becoming a pure-play
research models and services business, while Covance will expand its
global nonclinical drug development capabilities.


“This unique transaction is part of our strategy to transform drug
development, strengthening Covance’s ability to offer comprehensive
global nonclinical research services to the biopharma industry,” said
David P. King, chairman and CEO of LabCorp. “Together, we are taking a
creative and collaborative approach to early-stage research, which
demonstrates LabCorp’s commitment to providing clients with innovative
solutions that will ultimately improve health and improve lives.”

“This landmark agreement will provide an enhanced experience to our
valued customers across both segments of our company and closely aligns
with our vision to work together to build a healthier and safer world,”
said Dr. Adrian Hardy, president and CEO of Envigo. “We are excited to
welcome the team members who will be joining our expanded research
models and services entity and for our colleagues who will become
important contributors to one of the world’s most innovative and
respected contract research organizations. As a result of the multi-year
strategic supply collaboration, we look forward to partnering with our
colleagues at Covance to advance critical, life-enhancing research.”

The proposed transactions are subject to labor consultations, regulatory
approvals and customary closing conditions, and are expected to close
within two months.

Strategic Highlights

Enhances the reach and scope of Covance nonclinical development

  • The divestiture of Covance Research Products through this transaction
    simplifies and focuses the Covance Drug Development nonclinical
    research business model.
  • The infusion of additional scientific and technical expertise and
    industry insight from Envigo will enable Covance to enhance its
    nonclinical capabilities, including respiratory, with additional
    facilities in Europe and the U.S. to meet growing client needs.
  • The combined Covance nonclinical research business will increase its
    employee base by nearly one-third, to approximately 4,200 employees
    globally.

Creates a comprehensive research models and services business

  • The combination of these two complementary premier suppliers of
    research models and services will enable clients to more easily source
    the best models for their research needs to meet demand across
    biopharma, the contract research organization industry, government and
    academia.
  • The new business, branded as Envigo, will have more than 1,200
    employees globally.
  • Customers will benefit from an enhanced focus and ability to invest in
    new services and products.
  • The new Envigo research models and services business and Covance will
    continue to collaborate through a strategic supply agreement so
    clients will continue to receive access to the high-quality research
    models and services to which they are accustomed, as well as expanded
    access to a full range of models, diets and bedding.

LabCorp Transaction Details

The proposed transactions will result in net implied cash consideration
to be paid by LabCorp of $485 million. The net impact of the proposed
transactions will be an incremental $156 million in LabCorp’s revenues
on a pro forma 2018 basis. The proposed transactions are expected to
meet LabCorp’s financial criteria of earnings and cash accretion in year
one and exceeding the cost of capital by year three. LabCorp will
provide an update on its first-quarter earnings call.

Advisers

Goldman Sachs & Co. LLC is serving as financial adviser to LabCorp.
Hogan Lovells US LLP is serving as LabCorp’s legal counsel. Wells Fargo
Securities, LLC is serving as financial adviser to Envigo, and Cahill
Gordon & Reindel LLP is serving as Envigo’s legal counsel.

About LabCorp

LabCorp (NYSE: LH), an S&P 500 company, is a leading global life
sciences company that is deeply integrated in guiding patient care,
providing comprehensive clinical laboratory and end-to-end drug
development services. With a mission to improve health and improve
lives, LabCorp delivers world-class diagnostic solutions, brings
innovative medicines to patients faster, and uses technology to improve
the delivery of care. LabCorp reported revenues of more than $11 billion
in 2018. To learn more about LabCorp, visit www.LabCorp.com,
and to learn more about Covance Drug Development, visit www.Covance.com.

About Envigo

Envigo provides mission-critical products and research services for
biopharmaceutical, crop protection, and chemical companies as well as
universities, governments, and other research organizations. Our company
is founded on the principle that research partnerships depend on
unmatched expertise, unwavering dedication to customer service and
shared goals. We are committed to helping customers realize the full
potential of their research and products as we work together to build a
healthier and safer world.

LabCorp Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of the federal securities laws with respect to the proposed
transaction between LabCorp and Envigo, including statements regarding
the benefits of the transaction, the anticipated timing of the
transaction and the products and markets of each company. These
forward-looking statements generally are identified by the words
“believe,” “project,” “forecast,” “expect,” “anticipate,” “estimate,”
“intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,”
“will,” “would,” “will be,” “will continue,” “will likely result,” and
similar expressions. Forward-looking statements are predictions,
projections and other statements about future events that are based on
current expectations and assumptions and, as a result, are subject to
risks and uncertainties. Actual results could differ materially from
those suggested by the forward-looking statements in this press release,
due to factors including but not limited to: (i) the risk that the
transaction may not be completed in a timely manner or at all, which may
adversely affect LabCorp’s business and the price of its common stock,
(ii) the failure to satisfy the conditions to the consummation of the
transaction, including the receipt of certain governmental and
regulatory approvals, (iii) the occurrence of any event, change or other
circumstance that could give rise to the termination of the transaction
agreement, (iv) the effect of the announcement or pendency of the
transaction on LabCorp’s or Envigo’s business relationships, operating
results, and business generally, (v) risks that the proposed transaction
disrupts current plans and operations of Envigo or LabCorp and potential
difficulties in affected employee retention as a result of the
transaction, (vi) risks related to diverting management’s attention from
ongoing business operations, (vii) the ability of LabCorp to
successfully integrate Envigo’s nonclinical contract research operations
and product lines, (viii) the possibility that Envigo’s nonclinical
contract research services business will not meet its projected
financial results, (ix) the success of the strategic supply agreement
between LabCorp and Envigo and (x) the ability of LabCorp to implement
its plans, forecasts, and other expectations with respect to Envigo’s
business after the completion of the proposed transaction.
The
foregoing list of factors is not exhaustive. You should carefully
consider the foregoing factors and the other risks and uncertainties
that affect the businesses of LabCorp described in the RISK FACTORS
section of LabCorp’s Annual Report on Form 10-K for the year ended
December 31, 2018, subsequent Quarterly Reports on Form 10-Q, and in
LabCorp’s other filings with the SEC. The information in this press
release should be read in conjunction with a review of LabCorp’s SEC
filings
including the information under the heading MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
in LabCorp’s most recent Form 10-K and Form 10-Q. Forward-looking
statements speak only as of the date they are made. Readers are
cautioned not to put undue reliance on forward-looking statements, and
LabCorp assumes no obligation and does not intend to update or revise
these forward-looking statements, whether as a result of new
information, future events, or otherwise.

Contacts

LabCorp Contacts:
Media: Sue Maynard: +1 336-436-8263
[email protected]

Investors: Clarissa Willett: +1 336-436-5076
[email protected]

Envigo Contact:
Paul Surdez: +1 732-873-6682
[email protected]

leverton

Content is the most important part of having quality links to your website. With Area-Info.net, we provide a quality location to share your story and include links to your website to help you grow. If you would like to learn more, visit this page to see how you can use Area-Info.net to rank higher and quicker in search engines. Contact me directly at [email protected] with any questions, or to schedule speaking engagements.

You May Also Like