LabCorp, the Burlington-based life science conglomerate, is getting even bigger – with a bit of a North Carolina touch.
In a deal disclosed early Monday, LabCorp says it is buying contract research organization Chiltern, which maintains a a major presence in Wilmington and has been growing quite rapidly on its own through acquisitions.
The deal is worth some $1.2 billion – in cash.
The companies announced the deal before the markets opened Monday.
With the move, LabCorp further expands its competition with Durham-based QuintilesIMS, another mammoth, global life science services provider.
The deal “strengthens LabCorp’s position as a global life sciences company with leading diagnostics and drug development businesses,” LabCorp declared.
Chiltern operates globally and has more than 4,500 employees.
Once the deal closes, Chiltern will be made part of LabCorp’s Covance business unit, which is led by a former Quintiles executive. LabCorp bought Covance in 2014 for some $6.1 billion.
“Since LabCorp acquired Covance, we have grown the CRO business to nearly $3 billion in annual revenue,” said John Ratliff, CEO of Covance. “We now join with Chiltern to create a market-leading CRO, with more than 20,000 talented employees around the world. The addition enhances Covance’s offerings as a major partner serving the top 20 biopharma segment and expands our current offering to include a dedicated focus on the high-growth emerging and mid-market biopharma segments. We are very pleased to welcome the Chiltern team to the LabCorp family as we work together to realize the promise of this unique and powerful combination.”
LabCorp CEO and Chairman David King said the deal “strengthens our position as a leading life sciences company that delivers innovative diagnostics and drug development solutions to improve health and improve lives.
“Our acquisition of Covance has demonstrated the value of combining diagnostic and CRO capabilities, expertise, data and leadership,” he explained. “The addition of Chiltern furthers our strategy and will provide us with enhanced capabilities across a broader client base as we continue to innovate and grow.”
Last week, LabCorp noted a record quarter for revenue and King noted that the company was “well positioned” for further growth.
The Chiltern deal expands LabCorp’s push into the contract research organization business. Chiltern is forecast to generate some $550 million in revenue this year with a business backlog of some $1 billion.
“Joining LabCorp and Covance will allow Chiltern to expand its collaborative approach to bring better, more personalized therapies to market for patients every day,” said Jim Esinhart, Chiltern’s CEO. “Customers will benefit from the expanded capabilities this provides and our employees will have a greater opportunity to propel research into the future with strong, supportive partners.”