By Ron Shinkman, Editor, Laboratory Industry Report
LabCorp will acquire a significant presence in women’s health assays.
The North Carolina-based LabCorp announced the acquisition of Pathology, Inc. on Dec. 10. Terms of the transaction were not disclosed.
The lab is based in Torrance, Calif., just south of Los Angeles and has 19 physicians on staff. Although it provides a full range of pathology services, its primary focus has been on women’s health. The company operates an ancillary operation in Chicago.
“Pathology, Inc. is a premier laboratory known for quality, science and innovation in women’s health testing,” said LabCorp Chief Executive Officer Dave King in a statement. “It is an excellent fit with LabCorp’s existing women’s health service offerings and supports our mission to provide world class diagnostic solutions that improve health and improve lives. In addition to Pathology, Inc.’s strategic fit, the transaction meets LabCorp’s financial criteria of being accretive to earnings in year one and earning our cost of capital by year three.”
Michael Cherny, a managing director with the firm Evercore ISI observed in a recent report that the deal represents a strategic expansion by LabCorp into both pathology and women’s health. And while he expects it to represent less than 1 percent incremental revenue growth, it “represents a sold tuck-in.”
LabCorp said it expected the deal to close by the first quarter of 2016.