After months of rumors and amid a larger flurry of CRO M&A activity, LabCorp has bought out U.K. CRO Chiltern.
Both have been on the M&A trail of late, with LabCorp buying CRO Covance in 2015 for $6 billion (and this year slashing jobs at the company), while midsize CRO Chiltern has also been beefing itself up over the years, and two years’ ago bought up Theorem Clinical Research in a move to strengthen its global presence.
Back in May, Chiltern also acquired Japanese CRO Integrated Development Associates (IDA), boosting its Asia footprint.
Now, LabCorp will subsume Chiltern into its ever-expanding biopharma services unit for $1.2 billion in cash. For its money, it will see a boosted CRO offering, 20,000 employees, a wider global footprint, medical device development ops, and will dovetail will Covance’s late phase trial work with Chiltern’s expertise in early clinical development.
Chiltern has forecasted 2017 sales and adjusted EBITDA of $550 million and $95 million, respectively, and the CRO has a backlog worth $1 billion.
“This acquisition strengthens our position as a leading life sciences company that delivers innovative diagnostics and drug development solutions to improve health and improve lives,” said David King, chairman and CEO of LabCorp.
“Our acquisition of Covance has demonstrated the value of combining diagnostic and CRO capabilities, expertise, data and leadership. The addition of Chiltern furthers our strategy and will provide us with enhanced capabilities across a broader client base as we continue to innovate and grow.”
“Since LabCorp acquired Covance, we have grown the CRO business to nearly $3 billion in annual revenue,” added John Ratliff, CEO of Covance.
“We now join with Chiltern to create a market-leading CRO, with more than 20,000 talented employees around the world. The addition enhances Covance’s offerings as a major partner serving the top 20 biopharma segment and expands our current offering to include a dedicated focus on the high-growth emerging and midmarket biopharma segments. We are very pleased to welcome the Chiltern team to the LabCorp family as we work together to realize the promise of this unique and powerful combination.”
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This comes amid a larger boom in CRO and biopharma services deals over the past two years, with the biggest coming last October, when the world’s largest CRO and one of the biggest healthcare data and consulting firms combined to become one major $19 billion, 50,000-strong company, now known as QuintilesIMS.
And over the past year, in an unprecedented move, Japanese pharma Takeda has forged a new joint venture with PRA Health to help run much of its R&D amid a major rejigging of its research ops.