On September 1, 2017, LabCorp (NYSE: LH) confirmed that its previously announced acquisition of Chiltern had been completed. LabCorp will absorb Chiltern into its Covance Drug Development business. The acquisition is expected to create a CRO with more than 20,000 employees all around the world. It will simultaneously enhance Covance’s offerings and give it the ability to focus on the high-growth emerging and mid-market biopharma segments.
Members of the Covance executive team will be integrated with Chiltern members. The executive team will ultimately consist of leaders from both companies. Chiltern is forecasted to produce a 2017 revenue of roughly $550 million and adjusted EBITDA of $95 million. LabCorp anticipates the acquisition to be accretive to adjusted earnings per share and free cash flow in a year, without taking one-time costs and benefits of cost synergies into account.
Chiltern is expected to earn its cost of capital by year three. LabCorp will provide updated guidance that includes Chiltern during its quarterly earnings call in October.