Labcorp Continues Its Outreach Labs Buying Spree
While the overall M&A market has been slow in 2022, Labcorp has been on a bit of an acquisitions binge.
Hospitals seeking to outsource their outreach lab operations create acquisition opportunities for large companies that have the scale to streamline testing services and reduce costs. Few companies have been more aggressive in cashing in on these opportunities than Labcorp. Over the years, the diagnostics giant has spent over $3.5 billion to acquire dozens of labs in multiple sectors and across multiple markets. While the overall merger and acquisition (M&A) market has been slow in 2022, Labcorp has been on a bit of an acquisitions binge.
The RWJBarnabas Acquisition
On Aug. 23, Labcorp announced the closing of its latest strategic buy, the acquisition of the hospital outreach lab business of New Jersey’s largest academic health system, RWJBarnabas Health (RWJBH), for an undisclosed price. The purchase covers all 12 of RWJBH’s acute care hospitals across eight New Jersey counties.
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It’s a perfect fit. Labcorp has been providing lab services to RWJBH hospitals for years. The expanded relationship with RWJBH will build on the collaboration and provide patients “enhanced access to high-quality laboratory services, seamless data integration and connectivity and exceptional value to help improve patient care and outcomes,” according to the company’s Northeast Division senior vice president Bill Haas, noting that RWJBH physicians and patients will now have access to an expanded test menu and the company’s patient service center networks, including Labcorp at Walgreens.
The RWJBH acquisition comes on the heels of the North Carolina company’s purchase (also at an undisclosed price) of strategic outreach lab assets from another NJ health system client, AtlantiCare, which closed on May 9.
Both acquisitions follow the same basic partnership model that Labcorp has used to acquire other outreach labs outside of the Garden State. The company has forged similar strategic relationships with health systems across the country, including two new partnerships that closed this year:
- On March 10, Labcorp entered a partnership to acquire the outreach lab operations of South Carolina system Prisma Health; and
- On Feb. 14, Labcorp partnered with Ascension to provide lab management services to, and purchase certain assets associated with, the St. Louis-based Catholic non-profit health system’s outreach lab business in 10 different states, a deal expected to generate between $500 million and $600 million in combined revenues during the first year.
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Here’s a summary of the other key M&A diagnostic deals that were signed or closed in August 2022:
Mergers, Acquisitions, & Asset Sales
| Acquiring Company | Target(s) | Deal Summary |
|---|---|---|
| Labcorp | RWJBarnabas Health | • Price: Undisclosed • Status: Closed • Labcorp acquires hospital outreach lab business of largest academic health system in New Jersey |
| Eurobio Scientific | Genome Diagnostics | • Price: €135 million ($137.2 million) in cash • Status: Signed agreement to acquire with no closing date announced • French firm acquires provider of molecular diagnostic assays and software for transplantation including products for human leukocyte antigen and killer cell immunoglobulin-like receptor typing • GenDx to continue to operate at its Dutch headquarters and North American office in Chicago, and keep its existing sales and global distribution network |
| Agilent Technologies | Polymer Standards Service | • Price: Undisclosed • Status: Closed • Acquisition of provider of solutions for polymer characterization and software to define makeup of molecular structures expands Agilent’s offerings to chemical and biopharmaceutical industries for analysis of natural and synthetic polymers |
| Bio-Rad Laboratories | Curiosity Diagnostics | • Price: $100 million in cash and up to $70 million in future milestone payments • Status: No closing date announced • Acquisition of 100 percent of outstanding shares of subsidiary of Warsaw-based Scope Fluidics, which is developing a 15-minute sample-to-answer multiple target PCR system called PCR One to enable Bio-Rad "to bring a new generation of rapid PCR systems to market" |
| CirrusDx | Dascena Labs | • Price: Undisclosed • Status: Closed • Acquisition of Houston-based lab business of a CLIA lab with high-volume specialized testing capabilities expands CirrusDx’s sequencing capabilities |
| MDxHealth | Genomic Health (subsidiary of Exact Sciences) | • Price: Up to $100 million, including $25 million in cash for 691,171 American depositary shares (ADS) worth approximately $5 million, with Exact Sciences to get up to $70 million based on additional revenue milestones in fiscal years 2023 through 2025 • Status: Closed • Acquisition of Oncotype DX GPS prostate cancer testing business from Exact Sciences subsidiary • MDxHealth has option to settle milestone payments in cash or via issuance of additional shares |
| Biosynth Carbosynth | EUCODIS Bioscience | • Price: Undisclosed • Status: Signed agreement to acquire • Supplier of critical materials to acquire engineering firm that develops enzymes for pharma, biotech, and applied markets • Firms have collaborated closely in the past |
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