Labcorp to acquire BioReference Health assets for up to $225M

BURLINGTON, N.C. - Labcorp (NYSE: LH), a leading provider of laboratory services with a market capitalization of $20.4 billion and "GOOD" financial health according to InvestingPro, has announced an agreement to acquire select assets of BioReference Health, a subsidiary of OPKO Health, Inc. (Nasdaq: OPK). This strategic move is set to enhance Labcorp’s oncology and clinical testing services across the United States. The company, currently trading near its 52-week high, has demonstrated strong market performance with annual revenue of $13 billion.

The acquisition includes BioReference Health’s oncology-focused laboratory testing businesses, certain customer accounts, and other operating assets. With this addition, Labcorp aims to provide broader access to its high-quality laboratory services and expanded testing capabilities, particularly in the field of cancer care. The company’s solid financial foundation, with a 7% revenue growth and net income of $746 million in the last twelve months, positions it well for this expansion. According to InvestingPro’s analysis, Labcorp is currently slightly overvalued based on its Fair Value calculations.

Mark Schroeder, EVP and President of Diagnostics Laboratories at Labcorp, emphasized that the integration of BioReference Health’s services will offer "greater access to our world-class services to patients, physicians, and healthcare providers across the country." Schroeder also noted that the transaction aligns with Labcorp’s strategy to lead in oncology.

Dr. Phillip Frost, Chairman and CEO of OPKO, expressed that the sale of these diagnostic assets to Labcorp is an important step for BioReference Health to streamline operations and achieve profitability. Post-transaction, BioReference Health will focus on its core clinical testing services and expand its urology franchise with the proprietary 4Kscore test.

The assets being acquired by Labcorp currently generate approximately $85 million to $100 million in annual revenue. Labcorp will pay $192.5 million at closing, with an additional potential earnout of up to $32.5 million based on performance. The acquisition is expected to be accretive to Labcorp’s earnings from the first year.

Subject to customary closing conditions and state regulatory approvals, the transaction is anticipated to close in the second half of 2025. Following the closure, BioReference Health will continue its operations in New York and New Jersey and its 4Kscore franchise, which represented approximately $300 million in revenue for 2024. With analysts maintaining a Buy consensus and a P/E ratio of 27.5x, Labcorp continues to attract investor interest. For deeper insights into Labcorp’s financials and growth potential, including 8 additional ProTips and comprehensive valuation metrics, visit InvestingPro for the full research report.

Financial advisory services for the transaction are provided by Lazard for Labcorp, and Piper Sandler & Co. for OPKO Health. Legal counsel is being provided by Hogan Lovells and Kilpatrick Townsend for Labcorp, and Greenberg Traurig for OPKO Health.

This announcement is based on a press release statement and contains forward-looking statements, including anticipated benefits and impact of the transaction, which are subject to change based on various factors.

In other recent news, Laboratory Corporation of America (LabCorp) has been the focus of several analyst upgrades and strategic developments. Citi upgraded LabCorp’s stock from Neutral to Buy, raising the price target to $300, citing strong utilization rates in the Labs industry and potential benefits from the company’s core diagnostics business. Similarly, Truist Securities increased the price target to $285, maintaining a Buy rating due to LabCorp’s strong fourth-quarter performance and promising 2025 guidance. Jefferies also raised its price target to $290, highlighting the company’s robust fourth-quarter earnings and strong free cash flow, despite some margin impacts from transient items.

LabCorp recently announced the clinical availability of Labcorp Plasma Complete, a liquid biopsy test designed to aid oncologists in tailoring personalized treatment plans for patients with advanced solid tumors. This test is part of LabCorp’s efforts to enhance its oncology portfolio and support personalized patient care. Additionally, the company’s acquisition of Invitae is expected to be dilutive to margins initially but is anticipated to break even and potentially become accretive in the future.

Meanwhile, Immutep Limited reported its half-year financial results, though specific financial details were not disclosed in the summary. The comprehensive report is available in the SEC filing, providing insights into the company’s financial performance. These developments reflect LabCorp’s strategic initiatives and ongoing efforts to strengthen its market position and financial outlook.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.