LabCorp To Acquire Covance - Quick Facts

(RTTNews) - Laboratory Corp. of America Holdings (LH), a provider of clinical lab tests, Monday said it agreed to acquire contract research company Covance Inc. (CVD) for cash and LabCorp shares with an enterprise value of around $5.6 billion.

LabCorp. expects the acquisition to boost adjusted earnings in 2015 and achieve annual cost synergies of over $100 million within three years of completion.

Covance shareholders will receive as compensation $75.76 cash and 0.2686 LabCorp shares for each Covance share. LabCorp will fund the transaction through cash on hand as well as debt financing.

The agreed price represents a 32 percent premium to Covance's closing stock price of $79.90 on October, LabCorp said in a statement.

Covance provides early proof-of-concept drug studies and manages clinical trials for pharmaceutical companies. Once the deal, which has been approved by the boards of both the companies, is completed, Covance shareholders will own about 15.5 percent of the combined company.

The acquisition is scheduled to close in the first quarter of 2015.