Labcorp to spin off clinical-development business (updated)

Laboratory of America Holdings

28/07/2022 12:22

(Adds details on spin off, background)
    July 28 (Reuters) - Laboratory Corp of America Holdings
 LH.N  said on Thursday it would spin off its wholly owned
business focused on clinical drug trials, sending its shares up
nearly 4%.
    The planned spin-off will result in two independent,
publicly traded companies - Labcorp and the clinical development
business, the company said.
    The clinical-development segment was started in 2014 after
the $6.1 billion acquisition of Covance Inc.
    Contract research organizations, which were hurt after
clinical trials were disrupted due to the pandemic, have seen a
resurgence in demand as drugmakers and governments invest in
newer treatments.
    The sector saw several multi-billion dollar deals last year,
with medical device maker Thermo Fisher Scientific Inc  TMO.N 
acquiring contract researcher PPD Inc  PPD.O  for $17.4 billion
and Icon Plc buying rival PRA Health Sciences in a roughly $12
billion deal.
    Labcorp initiated a strategic review last year after
investor pressure from Jana Partners, but that ended without a
merger or an acquisition as Labcorp offered its shareholders
dividend and approved a $2.5 billion buyback program.
    Adam Schechter will continue to lead Labcorp as chairman and
chief executive officer following the completion of the planned
spin-off, which is expected to complete in the second half of
2023.
    Shares of Labcorp were up nearly 4% at $258.80 in premarket
trading.

 (Reporting by Mrinalika Roy in Bengaluru;
Editing by Vinay Dwivedi and Shinjini Ganguli)
 ((mrinalika.roy@thomsonreuters.com;))