Genzyme Sells Genetic-Testing Business to LabCorp for $925M
Having snubbed sanofi-aventis’ takeover offer, firm likes LabCorp as new home for esoteric testing operation.!--h2>
Genzyme has agreed to sell its Genzyme Genetics business to LabCorp for $925 million in cash. LabCorp estimates that the cost of the acquisition, net of expected tax benefits but less acquisition-related expenses, will amount to about $795 million. The deal includes all Genzyme Genetics’ testing services, technology, IP rights, and nine testing laboratories. The agreement comes just two weeks after Genzyme rejected sanofi-aventis' $18.5 billion bid to buy the whole company, without discussing the $69 per share offer.
Genzyme Genetics offers reproductive and oncology testing services and counseling to the clinical genetics-testing community, along with preclinical and clinical development testing services to the biopharmaceutical industry. The business reported revenues of $371 million in 2009.
“This acquisition will substantially expand our capabilities in reproductive, genetic, hematology-oncology, and clinical trials central laboratory testing,” comments David P. King, chairman and CEO at LabCorp. “The acquisition of Genzyme Genetics provides us with an unprecedented opportunity for revenue growth in our key strategic focus areas of esoteric testing and personalized medicine.”
LabCorp claims to be one of the largest laboratory testing companies specializing in routine testing in the U.S., operating 38 primary testing locations and over 1,500 patient service centers. “LabCorp is the right strategic partner for Genzyme Genetics,” states Henri Termeer, Genzyme CEO. “The business will have the opportunity to continue to grow, service its customers, and fulfill its potential to bring continued innovation to important areas of the diagnostics field.”
Genzyme says selling its genetic diagnostics business is in line with plans first announced in May to find alternative futures for its diagnostics products, pharmaceutical intermediates, and genetic-testing businesses. Plans for selling the other two business units remain on track, the firm maintains. It says proceeds from the sales may be used to finance the second half of its $2 billion stock buyback, which is due to be completed by May 2011.