This has been rumored for some time – LabCorp to buy Genzyme
Laboratory Corp. of America Holdings (LH) has agreed to buy the genetic testing business Genzyme Corp. (GENZ) for $925 million as the medical-testing giant looks to expand into areas such as reproductive medicine and oncology.
Meanwhile, the sale comes as Genzyme has been struggling for more than a year with manufacturing problems at its most important plant, crimping supply of its two biggest drugs. As such, Genzyme in May said planned to shed three noncore operations–including genetic testing–by year's end "strategic alternatives" for three units while repurchasing $2 billion of stock.
Genzyme said Monday that proceeds from the genetic-testing sale would go toward that end. The company's stock-market value is about $18 billion. Divestiture of the other two units–diagnostics and pharmaceutical intermediates–remains on track, said Genzyme.
"This acquisition will substantially expand our capabilities in reproductive, genetic, hematology-oncology and clinical trials central laboratory testing," said David P. King, chairman and chief executive of LabCorp.
Genzyme Genetics performs more than 1.5 million tests a year. It had about $371 million in revenue in 2009.
LabCorp in July said its second-quarter profit rose 13% following prior-year charges as revenue improved more than expected.
Genzyme closed at $70.79 Friday while LabCorp finished at $76.65. Neither traded premarket.
