LabCorp to acquire Chiltern for about $1.2B in cash
LabCorpand Chiltern announced that LabCorp will acquire Chiltern pursuant to a definitive agreement with Chiltern's shareholders in an all-cash transaction valued at approximately $1.2B. Once the transaction is complete, Chiltern will become part of LabCorp's Covance segment. Chiltern has a 35-year track record of growth as a provider of clinical services and solutions in multiple key therapeutic areas, with engagement models for biopharmaceutical and medical device companies. It has more than 4,500 employees around the world, including Asia-Pacific, and has conducted more than 1,800 studies across 87 countries in the last five years. Chiltern is a leading CRO among emerging-to-mid biopharma customers, with forecasted 2017 revenue and adjusted EBITDA of approximately $550M and $95M, respectively, and backlog of approximately $1B. The transaction meets LabCorp's financial criteria. Excluding one-time costs relating to the transaction and with the benefit of cost synergies, the company expects it to be accretive to adjusted earnings per share and free cash flow in year one, and to earn its cost of capital by year three. The acquisition is an all-cash transaction, which LabCorp expects to fund with a combination of bank financing and bonds. Following this transaction, LabCorp expects to maintain its investment-grade credit ratings. The transaction is subject to regulatory approvals and customary closing conditions, and is expected to close in the fourth quarter, 2017.