Labcorp is buying the clinical diagnostics and reproductive women’s health businesses of BioReference Health, excluding those assets in New York and New Jersey. Labcorp has returned to being fully focused on lab testing after last year’s spinoff of Fortrea, its former clinical trial services business.

By FRANK VINLUANLabcorp’s testing capabilities are getting a little broader with the $237.5 million acquisition of certain laboratory assets from BioReference Health, a subsidiary of Opko Health.
The BioReference assets going to Labcorp span clinical diagnostics and reproductive women’s health across the U.S. and account for about $100 million in annual revenue. The deal announced Thursday excludes those assets in New York and New Jersey, where BioReference will continue to maintain its full operations. BioReference will also continue to offer oncology and urology diagnostic services nationwide.
Burlington, North Carolina-based Labcorp was founded as a laboratory testing company in 1969. In 2015, it entered drug development services through the $6.2 billion acquisition of Covance, a contract research organization. Labcorp has now once again become a laboratory-focused company after spinning off its former clinical trial services business last year. That standalone company is now known as Fortrea.
Acquisitions continue to be part of Labcorp’s growth strategy. In its 2023 annual report, Labcorp said it is looking for acquisitions that strengthen its scientific capabilities and enhance therapeutic expertise, enhance esoteric testing and global drug development capabilities, and increase its presence in key geographic areas.
In a note sent to investors, Leerink Partners analyst Michael Cherny characterized Labcorp’s buyout of the BioReference assets as a prudent use of capital and part of a balanced capital deployment strategy. He added that the acquisition continues the smaller tuck-in deals strategy pursued by both Labcorp and peer lab testing giant Quest Diagnostics, both of which are acquiring regional labs or hospital outreach labs.
“Today’s BioReference asset purchase fits nicely into that theme, as deals of this kind tend to generate strong (and predictable) ROIs,” Cherny wrote, referring to returns on investment.
Meanwhile, BioReference executives say selling assets to Labcorp enables it to streamline its laboratory services business while still retaining core operations. In a prepared statement, Opko Chairman and CEO Philip Frost said the transaction “is part of our previously announced effort to re-establish profitability at our clinical laboratory business while at the same time better positioning Opko as an innovative biopharmaceutical company.”
The transaction is expected to close in the second half of this year.
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