Envigo and Covance in asset swap
Envigo’s Research Models Services business is to acquire the Research Products business of LabCorp’s Covance subsidiary, becoming a pure-play research models and services business. As part of the same transaction, Covance is also acquiring Envigo’s non-clinical research services business, expanding its services in that field. The two transactions are subject to labour consultations, regulatory approvals and customary closing conditions, and are expected to close by mid-June.
LabCorp will pay a net $485 million to Envigo to comlete the deal, which will add $156 million to its revenues on a pro forma 2018 basis. It is expected to add to LabCorp’s earnings within a year.
The new Envigo will have over 1,200 employees, as well as a more comprehensive research models and services business for the biopharmaceuticals, CRO, government and academic markets. It will collaborate with Covance through a strategic supply agreement to ensure continuity of supply and expanded customer access to a full range of models, diets and bedding.
Covance said that divesting Research Products “simplifies and focuses the Covance Drug Development nonclinical research business model”, while the addition of new scientific expertise from Envigo will both expand its non-clinical capabilities, including respiratory, and give it additional facilities in Europe and the US to meet growing client needs. The employee base will grow by nearly 33% to 4,200.