The Top 10 Clinical Lab Acquisitions of 2023

After a long period of dormancy, strategic acquisition activity in the clinical laboratory and in vitro diagnostics market is beginning to rebound to close to pre-pandemic levels. Seven months into the year, there were already four reported deals valued at over $1 billion in 2023, as many as in all of 2022.¹

Top 10 Diagnostic M&A Deals of 2023 (By Deal Value)

Major Lab Companies Become Sellers

The twist in these semi-annual figures is that in three of the year’s biggest deals, including two of the four billion-dollar acquisitions, a major lab company was the seller, rather than the buyer. Thus, testing giants that made massive profits from COVID-19 test products and services are now divesting strategic assets to reposition now that the coronavirus market has shrunk:

• Revvity (formerly known as PerkinElmer) sold its food and enterprise business (which will retain the PerkinElmer brand name) for $2.45 billion as part of a plan to refocus on its core business composed of a slimmer, more nimble structure of just two units—life sciences and diagnostics²
• After spending its COVID-19 earnings for a series of acquisitions in 2021 and 2022, including the $1.5 billion buyout of Parata Systems, Becton Dickinson sold off its surgical instrumentation unit and V. Mueller^TM, Snowden-Pencer^TM, and Genesis^TM product lines to Irish company STERIS for $540 million^3,4
• Meridian Biosciences sold itself in entirety to South Korean diagnostic company SD Biosensor and investment firm SJL Partners for $1.53 billion⁵

The Three Most Significant M&A Deals of the Year

Following more traditional approaches, the nation’s three biggest lab companies made potentially significant long-term moves via strategic acquisitions that extend beyond simple add-ons:

1. Quest Bolsters Personalized Cancer Position with Haystack Oncology Buy

Quest and Labcorp have continued to acquire hospital outreach and health system labs at a steady pace, even during the slow M&A times. In July, Quest took an enormous stride forward in personalized cancer testing by acquiring former Johns Hopkins spinout Haystack Oncology for $300 million in cash upfront and up to $150 million more in future milestone payments.⁶ The allure of Haystack is its liquid biopsy ctDNA-based technology enabling minimal residual disease patients to plan post-surgical treatment.

2. Labcorp Scoops Up Enzo Biochem’s Lab Testing Business

In 2022, Labcorp made a strategic play to bolster its genetic testing profile by acquiring next-generation sequencing test maker Personal Genome Diagnostics for $450 million and up to another $125 million in contingent milestone payments.⁷ In March, Labcorp went back to meat-and-potato lab testing by agreeing to acquire Enzo Biochem’s clinical laboratory division for roughly $146 million, while also spinning off its Covance Inc. clinical trials and drug development business into a separate entity.⁸ The $146 million purchase price for Enzo dropped to just over $113 million when the deal was completed in July.⁹

3. Abbott Boosts Cardio Device Offerings with CSI Acquisition

With its main rivals focusing on core lab testing, Abbott Laboratories went in the other direction by plunking down $890 million to buy Cardiovascular Systems (CSI) to strengthen its cardio device offerings. CSI produces medical devices for atherectomy, a less invasive method of treating plaque buildup in blood vessels.¹⁰

References:

1. https://www.g2intelligence.com/ma-report-the-top-15-diagnostic-deals-of-2022/
2. https://www.newmountaincapital.com/new-mountain-capital-announces-intent-to-acquire-perkinelmers-applied-food-and-enterprise-services-businesses-for-up-to-2-45-billion/
3. https://investors.bd.com/news-releases/news-release-details/bd-completes-acquisition-parata-systems
4. https://sterisplc.gcs-web.com/news-releases/news-release-details/steris-expands-healthcare-products-offering-acquisition-surgical
5. https://www.prnewswire.com/news-releases/meridian-bioscience-inc-enters-into-agreement-to-be-acquired-by-sd-biosensor-and-sjl-partners-in-1-53-billion-all-cash-transaction-301582745.html
6. https://newsroom.questdiagnostics.com/2023-04-27-Quest-Diagnostics-to-Acquire-Haystack-Oncology,-Adding-Sensitive-Liquid-Biopsy-Technology-for-Improving-Personalized-Cancer-Care-to-Oncology-Portfolio
7. https://ir.labcorp.com/news-releases/news-release-details/labcorp-strengthens-oncology-leadership-position-addition
8. https://www.g2intelligence.com/lab-business-its-back-to-basics-for-labcorp-enzo-biochem/
9. https://www.globenewswire.com/en/news-release/2023/07/24/2709935/0/en/Enzo-Biochem-Completes-Sale-of-Clinical-Laboratory-to-Labcorp.html
10. https://abbott.mediaroom.com/2023-02-08-Abbott-to-Acquire-Cardiovascular-Systems,-Inc

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Here’s a summary of the key M&A diagnostic deals that were announced or closed in the period from late July through early August 2023:

Mergers, Acquisitions, and Asset Sales