Diagnostics firm Laboratory Corporation of America Holdings (LabCorp) has added drug development to its business with the acquisition of contract research organisation Covance.
The deal, valued at $5.6bn, creates one of the world’s leading healthcare diagnostic companies, combining LabCorp’s expertise in medical testing and the full-service drug development of Covance, which includes market access and nutritional businesses.
The combined company will leverage technologies that improve patient recruitment for clinical trials, enhance efficiency in the conduct of clinical trials and deliver data faster to drug sponsors, physicians and patients.
LabCorp chairman and CEO David P King and LabCorp chief financial officer Glenn Eisenberg will serve in the same positions for the combined company. Covance chairman and CEO Joe Herring will lead LabCorp’s Covance division and report directly to King.
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, characterised by global scale, enhanced offerings, new efficiencies, broader and deeper customer relationships, and a differentiated business model.”
Herring added: “We are thrilled to join forces with another industry leader through a transaction that delivers to our shareholders substantial immediate cash value along with a meaningful stake in a combined company with exciting growth opportunities.”
The combined company will remain at LabCorp’s headquarters in Burlington, North Carolina, while the Covance division headquarters will still be based in Princeton, New Jersey.
The transaction is expected to close in the first quarter of 2015.