BURLINGTON – Global life science giant LabCorp has closed on its $485 million deal with Envigo, a research firm, and has borrowed $850 million to help finance it.
As part of the LabCorp-Envigo asset swap, hundreds of employees will be swapping companies.
The deal was announced in April and received regulatory approval late Monday, LabCorp (NYSE: LH) said.
“This unique transaction furthers a key element of our strategy to provide the biopharma industry with comprehensive drug development services that help bring innovative medicines to patients,” said David King, chairman and CEO of LabCorp, in a statement. “We are delighted to welcome our new colleagues from Envigo to Covance and look forward to driving growth and innovation with enhanced nonclinical research solutions that ultimately improve health and improve lives.”
In a later news release, LabCorp disclosed it had borrowed $850 million. Part of the proceeds will be used for the Envigo deal.
Hundreds of employees to swap companies in complex $485M LabCorp deal
LabCorp will add some 1,400 employees to its Covance Drug Development firm as part of the complex Envigo transaction.
At the same time an unspecified number of Covance employees will become part of Envigo, which is based in New Jersey and the United Kingdom.
The dea involves the swap of Convance’s Research Products business for Envigo’s nonclinical research business.
Convance employees involved in the move to Envigo are based in the US, LabCorp noted in the announcement.
LabCorp acquired Covance in 2014 for some $14 billion, vastly expanding the firm beyond its traditional services of laboratory testing.
LabCorp and Envigo also struck a multi-year “strategic supply collaboration” as part of the deal, said Envigo CEO Adrian Hardy. The deal includes $485 million “cash consideration” from LabCorp.
The loan credit facility of $850 million is for two years. Some $250 million will be used to repay outstanding debt, LabCorp said.
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