LabCorp sells Covance Food Solutions to Eurofins for €553m
Covance Food Solutions offers routine and specialised laboratory testing and consulting services focused on product safety, quality and adherence to internal and external standards for existing and in-development food, beverage and supplement products.
It operates 12 facilities (nine in the US, two in the UK and one in Asia).
For the twelve months ending 31 December 2017, Covance Food Solutions recorded pro-forma revenue of $150m (€124m).
It employs 850 staff and expects to generate revenues of $160m (€132.4m) in 2018.
Boost offering in competitive market
Eurofins said as the firms have a complementary geographic footprint and service offering no restructuring of either business is necessary.
Dr Gilles Martin, Eurofins CEO, said the integrated network of labs will give customers access to a range of services and technological capabilities.
“Covance Food Solutions has a strong track record of success offering tailored testing and product design solutions for the food industry and enjoys outstanding credibility with its customers,” he said.
“Its competencies, reputation for scientific excellence and complementary geographic footprint, client focus and service offerings further strengthen Eurofins’ global offering in the very competitive food testing market.”
Eurofins has more than 35,000 staff in 400 labs across 44 countries and a portfolio of 150,000 analytical methods for evaluating the safety, identity, composition, authenticity, origin and purity of biological substances and products.
Focus on lab business
Covance Food Solutions became part of LabCorp through its 2015 acquisition of Covance for $6.2bn (€5.13bn).
LabCorp said it has increased its technical capabilities, broadened geographic scope and its services for the food, beverage, dietary supplement and agricultural industries.
David P. King, chairman and CEO of LabCorp, said: “Over the three years LabCorp has owned Covance, it has become clear that the greatest opportunities for us to create lasting value come from the core lab business, the Contract Research Organization, and the enterprise-wide combination that is beyond lab and beyond CRO.
“The sale of Covance Food Solutions to Eurofins allows us to focus on our core mission of improving health and improving lives, and at the same time better positions Covance Food Solutions to serve the global food supply industry.”
The transaction is expected to close in Q3 2018 subject to regulatory and customary closing conditions.
Wells Fargo Securities is exclusive financial adviser to LabCorp. Hogan Lovells and Kelley Drye are serving as LabCorp’s legal counsel.