Industry Buzz: LabCorp Acquires LipoScience for $85.1 Million
LabCorp has taken a plunge into the cardiac testing realm, acquiring LipoScience Inc. in a deal valued at $85.1 million. Under the all-cash transaction, LabCorp agreed to pay $5.25 per share for the Raleigh, N.C.-based LipoScience, a premium of about 70 percent over LipoScience’s recent stock price. “We believe LipoScience becoming part of LabCorp is […]
LabCorp has taken a plunge into the cardiac testing realm, acquiring LipoScience Inc. in a deal valued at $85.1 million. Under the all-cash transaction, LabCorp agreed to pay $5.25 per share for the Raleigh, N.C.-based LipoScience, a premium of about 70 percent over LipoScience’s recent stock price. “We believe LipoScience becoming part of LabCorp is a great outcome for patients, physicians, and our other stakeholders,” said Howard Doran, LipoScience’s chief executive officer. LipoScience’s primary assay is the NMR LipoProfile test. The test works by using nuclear magnetic resonance imaging technology to identify low-density lipoprotein in the blood, a signal of a higher risk for cardiovascular disease. “LipoScience’s NMR LipoProfile test will enhance our innovative clinical decision support programs . . . as we provide ever-broader, differentiated knowledge services to physicians and patients,” said Dave King, LabCorp’s chief executive officer, in a statement. “Furthermore, LipoScience’s novel application of NMR technology furthers . . . our strategy by continuing our leadership in scientific innovation.” The acquisition will help solidify LabCorp’s foray into personalized health testing, which has become a growing niche among patients wanting to know more about the risks to their long-term health. LipoScience had been under financial stress as of late. Its stock began publicly trading early last year at $9 a share but rarely approached that price in the subsequent months. For the second quarter, ending on June 30, the company reported a loss of $4.1 million on revenues of $9 million. For the same quarter in 2013, its losses were $2.4 million on revenues of $13.3 million. The deal is expected to be a marginal improvement to LabCorp’s bottom line for now. Darren Lehrich, an analyst with Deutsche Bank, estimates the transaction will add about $35 million to $40 million in annual revenues to LabCorp and “not material to earnings per share given its size.” Deutsche Bank continued its “buy” rating of LabCorp stock, noting that its recent initiatives should contribute to revenue and profit growth. Takeaway: LabCorp is continuing to expand its personalized health portfolio with more acquisitions.