The DNA of LabCorp has changed significantly over the last year as it has made some huge purchases in order to diversify. And as a result of its latest wade deeper into the lab sector gene pool, it will begin testing DNA itself. The North Carolina-based LabCorp quietly closed a deal earlier this month for Virginia-based Bode Technology, a subsidiary of New York City-based Solution Point International. Terms of the deal were not disclosed. Bode focuses on DNA collection products, specialized DNA forensic analysis, and relationship (paternity, maternity, and other forms of familial) testing. The company works closely with law enforcement agencies, providing DNA analysis in as little as 90 minutes to match or eliminate specific criminal suspects or establish possession of evidence. It also operates some limited DNA databases and has been offering highly specialized services, such as clearing up the backlogs of thousands of untested rape kits collected in some jurisdictions. DNA testing has exploded since it was first used for criminal evidence analysis in the 1990s. Such testing, which initially focused on violent crimes such as murder, has become so ubiquitous it is now routinely used in less serious crimes, such as burglaries and auto thefts, under […]
The DNA of LabCorp has changed significantly over the last year as it has made some huge purchases in order to diversify. And as a result of its latest wade deeper into the lab sector gene pool, it will begin testing DNA itself.
The North Carolina-based LabCorp quietly closed a deal earlier this month for Virginia-based Bode Technology, a subsidiary of New York City-based Solution Point International. Terms of the deal were not disclosed.
Bode focuses on DNA collection products, specialized DNA forensic analysis, and relationship (paternity, maternity, and other forms of familial) testing. The company works closely with law enforcement agencies, providing DNA analysis in as little as 90 minutes to match or eliminate specific criminal suspects or establish possession of evidence. It also operates some limited DNA databases and has been offering highly specialized services, such as clearing up the backlogs of thousands of untested rape kits collected in some jurisdictions.
DNA testing has exploded since it was first used for criminal evidence analysis in the 1990s. Such testing, which initially focused on violent crimes such as murder, has become so ubiquitous it is now routinely used in less serious crimes, such as burglaries and auto thefts, under the theory that the majority of such crimes are committed by a small number of professional criminals, and that identifying their DNA would not only cut down the volume of property crimes dramatically but also potentially link those identified to previously unlinked crimes as well.
LabCorp said in a statement that Bode and its affiliate, Chromsomal Labs, would be folded into its specialty division, working in combination with its existing DNA Identity and Cellmark Forensics businesses, which have operations in both the United States and the United Kingdom. The combined ventures will provide DNA testing to federal and state governments, law enforcement agencies, crime laboratories, disaster management organizations, and to consumers both in the United States and other parts of the globe.
“We are very pleased that Bode Technology is joining the LabCorp family,” said LabCorp Chief Executive Officer Dave King. “Bode Technology’s capabilities strengthen our range of forensics and DNA identification testing services, furthering . . . our strategy by continuing our leadership in scientific innovation.” King added that the transaction is expected to be accretive to LabCorp’s overall bottom line within the first year of the acquisition and cover the cost of financing the deal within three years.
Sector observers say the deal is a continuation of LabCorp’s strategy to diversify—typified by its daring $5.6 billion acquisition of Covance earlier this year—and that DNA testing would provide a reliable stream of income from law enforcement and other governmental entities.
“You can see that LabCorp is really trying to diversify themselves with deals such as this,” said Lâle White, chief executive officer of XIFIN, a San Diego-based laboratory software and consulting firm. “This kind of testing is a very niche type of business, but it is probably contractually price-protected in many ways.”
However, as the cost of DNA testing has dropped dramatically—from thousands of dollars in the 1990s to hundreds of dollars or less today—margins tend to be fairly thin.
“My guess is that it could be growing because law enforcement needs this type of testing to proceed with cases, but governments will be price-sensitive and the margins may not be reasonable based on the contracts that would be involved,” said Jim Root, a senior consultant with Chi Solutions, a Michigan-based laboratory consulting firm. However, Root stressed that he was not overly familiar with this specific lab segment.
Takeaway: LabCorp continues to diversify its portfolio of lab services via acquisition.
