LabCorp said that the proposed deals will make the company to pay a net cash of $485m and will add an incremental $156m to revenues on a pro forma 2018 basis.
The deal will allow Envigo to become a pure-play research models and services business, while Covance to expand its global non-clinical drug development capabilities.
LabCorp chairman and CEO David King said: “This unique transaction is part of our strategy to transform drug development, strengthening Covance’s ability to offer comprehensive global non-clinical research services to the biopharma industry.”
The scientific and technical expertise and industry insight of Envigo will help Covance to advance its non-clinical capabilities. Covance facilities in Europe and the US will also allow LabCorp to meet growing requirements of the clients.
The combined Covance non-clinical research business will increase its employee base by nearly one-third, to around 4,200 employees across the globe.
The combined research models and services of both suppliers will allow clients to access best models for their research needs across biopharma, contract research organization industry, government and academia.
Envigo, which is a new branded business, will employ over 1,200 people across the globe.
Via strategic supply agreement, the new Envigo research models and services business and Covance will continue to provide research models and services, as well as full range of models, diets and bedding to the clients.
Subject to labor consultations, regulatory approvals and customary closing conditions, the proposed transactions are expected to be completed within two months.
Envigo president and CEO Dr Adrian Hardy said: “This landmark agreement will provide an enhanced experience to our valued customers across both segments of our company and closely aligns with our vision to work together to build a healthier and safer world.”
LabCorp provides comprehensive clinical laboratory and end-to-end drug development services, while Envigo offers mission-critical products and research services for biopharmaceutical, crop protection, and chemical companies as well as universities, governments, and other research organizations.