In order to strengthen its foothold in the personalized diagnostics testing market for cardiovascular and metabolic disorders, Laboratory Corporation of America Holdings (LH) has decided to acquire LipoScience, Inc. (LPDX) for $5.25 per share or a total enterprise value of $63 million. The transaction value stands at $85 million.
The offer price represents a 64.6% premium over the share price of LipoScience as on Sep 24, the day before the announcement.
While the news caused shares of LipoScienceto surge62.6% to $5.19, it failed to boost investors’ confidence for LabCorp which slipped 1.8% to $102.03 on Sep 25 close.
According to LabCorp, LipoScience – as a premium laboratory – provides specialized cardiovascular diagnostic tests based on nuclear magnetic resonance (NMR) technology. The company believes the NMR LipoProfile test will duly complement its five-pillar strategy. On one hand, it will encourage the strategy of scientific innovation – LabCorp’s fourth pillar. On the other hand, it will help improve the company’s fifth pillar – its innovative clinical decision support programs – by providing broader and differentiated knowledge services.
LabCorp is confident of the successful integration of this impending acquisition and expects LipoScience to serve as a strategic fit for the company. LabCorp expects the transaction to be accretive to its earnings in the first year and to earn cost of capital by the third year of completion.
Notably, LabCorp has fortified its foothold in the diagnostics space through both organic and inorganic means, and plans to collaborate with leading companies and academic institutions to provide a wider portfolio of tests. The company continues to increase its scale and competencies in clinical laboratory medicine through acquisitions ranging from routine capabilities to highly esoteric testing.
Earlier in 2014, LabCorp acquired Covance's high-complexity genomic laboratory for an undisclosed amount. Covance and LabCorp have entered into a five-year service agreement through which they will collaborate on offering the Seattle-based laboratory's services of Covance to clients. According to LabCorp, the acquisition will enhance its existing biomarker development and companion diagnostics capabilities.
More recently, LabCorp also entered into a partnership with United Healthcare to start a new healthcare program that will help in selecting the proper test at the right time and also facilitate payers to address concerns regarding both unit cost and trend.
Apart from LabCorp, some other well-placed stocks in the same sector are AmerisourceBergen Corporation (ABC) and McKesson Corporation (MCK).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment