BURLINGTON – Walgreens and LabCorp are business partners now with LabCorp opening a growing number of lab testing operations inside the drug giant’s pharmacies. Now comes talk that Walgreens might buy the Burlington-based life science giant, which employs thousands of people across the Triangle and North Carolina.
LabCorp (NYSE: LH) won’t comment.
Reports in Forbes and the Triad Business Journal cite comments from Wall Street analyst firm Raymond James as the source for the takeover talk.
A deal would not be cheap. LabCorp shares traded up Thursday at around $166 with a market cap of some $16 billion. Its 52-week high is $190.36.
“We think that the temptation to do ‘something’ will grow over time,” Raymond James analyst John Ransom and others wrote in a report Tuesday, according to Forbes. LabCorp and AmerisourceBergen Corp. are cited as possible targets.
In the report, Ransom pointed out: “From a strategic perspective, the ability to create a more healthcare-centric model by bringing the lab business into the Walgreens store is appealing, though owning a CRO is likely not something a retail pharmacy is interested in. Further, we remain unclear how aggressively (Walgreens) plans to move into primary care.”
Bruce Japsen, writing at Forbes, reported that “Some see LabCorp as a good fit. Walgreens’ effort to provide lab-testing services in its stores is part of an ongoing transformation into becoming more of a healthcare services company than a retailer.”
Japsen added that Walgreens CEO Stefano Pessina said in a conference call last month that the firm is “constantly reviewing a certain number of companies.” He would cite no names.