BURLINGTON – Fortrea, with 19,000 employees and based in Durham, becomes a reality early Monday following the completion of its spinoff from global life science firm Labcorp.

Fortrea stock began trading on the Nasdaq under the symbol “FTRE” and is led by CEO Tom Pike, who is a former CEO of Triangle-based Quintiles (now Iqvia). Labcorp shares (LH) were up slightly in trading Monday after the closing of the spin-off was announced. However, shares took a big hit over the weekend after its valuation was cut by financial services firm Morningstar.

Fortrea is off to a strong start. Shares opened slightly below $34 and were trading up more than 8% at $36.84 in afternoon trading.

Labcorp announced the completion of the dearly before markets opened Monday. It first announced plans to divide the company in July 2022.

Some 19,000 of Labcorp’s 80,000 employees are included in the spin-off.

Fortrea will focus on  Phase I-IV clinical trial management as well as technology solutions.

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$1.6 billion to Labcorp

As part of the deal, Fortrea made what the companies call “a cash distribution” to Labcorp of some $1.6 billion. Fortrea recently raised debt financing to help cover the cost. The payment is “partial consideration” for the Labcorp assets included in the spinoff.

“Fortrea has been established to bring sharpened focus to our purpose, which is partnering with customers to bring life-changing therapies to patients faster,” said Tom Pike, chairman and chief executive officer of Fortrea, in the announcement. “Now, as an independent company with increased operational agility and financial flexibility, we are the ideal size to deliver on this purpose. With our global scale, access to clinical data-driven insights, site relationships and decades of experience, Fortrea is able to bring customers tailored solutions as a trusted partner. Further, our proven leadership team and talented colleagues across the globe have the skills and experience to help us build a world-class culture of excellence. We look forward to continuing to deliver for patients, customers, employees and shareholders in the years ahead.”

The Fortrea press release included a Durham dateline, where Pike had listed previously as the address for his office.

Fortrea is built around Labcorp’s clinical trial testing business.

“I want to thank our teams for their tireless work in creating two strong, independent companies through the Fortrea spin,” said Adam Schechter, chairman and chief executive officer. “The transaction is intended to better meet customer needs, enable appropriate value-creating investments and unlock shareholder value. Moving forward, Labcorp is well positioned to deliver on our mission to improve health and improve lives.”

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Labcorp shareholders will receive one share of stock in Fortrea. Some 88 million shares were distributed, the companies said,

“The spin-off has been structured to qualify as a tax-free distribution to Labcorp’s stockholders and the company for U.S. federal income tax purposes,” Labcorp noted.

Fortrea board

Fortrea also announced its board of directors:

  • R. Andrew Eckert, Fortrea lead director; senior advisor to Permira; and formerly chairman, Varian Medical Systems
  • Betty Larson, chief people officer of GE HealthCare Technologies; and formerly executive vice president and chief human resources officer, Becton Dickinson
  • Peter Neupert, lead director, Adaptive Biotechnologies; director, Labcorp; and formerly corporate vice president, Health Solutions Group at Microsoft
  • Ed Pesicka, president and chief executive officer of Owens & Minor; and formerly group president and chief commercial officer, Thermo Fisher Scientific
  • Amrit Ray M.D., director of Ultragenyx Pharmaceutical; and formerly global president and head R&D and Medical, Pfizer Upjohn
  • David Smith, retired chief financial officer of Charles River Laboratories