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Labcorp To Spin Off Clinical Development Business

Clinical Development Business to be a Leading, Pure-Play Contract Research Organization with a Comprehensive Set of Clinical Trial Management, Market Access and Technology Capabilities Labcorp Remains a Leader in the

Benzinga · 07/28/2022 07:05

Clinical Development Business to be a Leading, Pure-Play Contract Research Organization with a Comprehensive Set of Clinical Trial Management, Market Access and Technology Capabilities

Labcorp Remains a Leader in the Laboratory Market with Highly Complementary, Laboratory-Focused Businesses including Routine and Esoteric Labs, Central Labs and Early Development Research Labs

Transaction Designed to Create Value Through Enhanced Strategic and Operational Focus

Labcorp to Discuss Spin-off and Second Quarter 2022 Financial Results at 9:00 a.m. ET Today

Labcorp (NYSE:LH) (the "Company"), a leading global life sciences company, today announced that its Board of Directors has authorized the Company to pursue a spin-off of the Company's wholly owned Clinical Development business to Labcorp shareholders through a tax-free transaction. The planned spin-off will result in two independent, publicly traded companies, each poised for strong, sustainable growth:

  • Labcorp: A leading global laboratory business comprising the Company's routine and esoteric labs, central labs and early development research labs, all of which are leaders with deep scientific expertise, vast health data and insights, and an extensive, advanced global laboratory network.
     
  • The Clinical Development Business: A leading, global Contract Research Organization (CRO) providing Phase I-IV clinical trial management, market access and technology solutions to pharmaceutical and biotechnology organizations.

Following the decision by the Board last year to initiate a dividend and accelerate the Company's share repurchase program, Labcorp's management team and Board continued to evaluate all avenues to further enhance stakeholder value. The planned spin-off is expected to provide each company with:

  • Strengthened strategic flexibility and operational focus to pursue specific market opportunities and better meet customer needs.
     
  • Focused capital structures and capital allocation strategies to drive innovation and growth.
     
  • A more targeted investment opportunity for different investor bases. 

"Spinning off the Clinical Development business will benefit customers and shareholders by creating two standalone businesses that are poised to accelerate growth and focus resources on distinct strategic priorities, customer needs and value creation," said Adam Schechter, chairman and CEO of Labcorp. "Our shareholders will be able to participate in the upside potential of two market-leading businesses in the global healthcare sector, each of which will be well-capitalized and positioned to generate sustainable growth with strong free cash flows and attractive returns. Our customers will continue to have access to our full range of capabilities with the same quality and seamless delivery of services they have come to expect from our teams. Today is a testament to our long history of growth through innovation and track record of delivering on our mission to improve health and improve lives."