Labcorp to acquire CHS outreach lab services for $195 million

FRANKLIN, Tenn. - Community Health Systems, Inc. (NYSE:CYH), a healthcare provider with $12.7 billion in annual revenue and showing strong momentum with a 25% gain year-to-date, announced today it has entered into a definitive agreement to sell select ambulatory outreach laboratory services to Labcorp (NYSE:LH) for $195 million in cash. According to InvestingPro data, CYH has demonstrated particularly strong returns over the past three months, reflecting growing investor confidence.

The transaction involves CHS’s outreach laboratory assets across 13 states, including patient service centers and in-office phlebotomy locations. CHS will continue to operate its inpatient and emergency department laboratories, as well as provide laboratory services for hospital-based services such as imaging and pre-admission testing.

"We are excited about this transaction with Labcorp, which allows us to focus on our core services and improve the overall patient experience," said Kevin Stockton, Executive Vice President, Operations and Development for CHS.

Mark Schroeder, EVP and President of Diagnostics Laboratories and Chief Operations Officer at Labcorp, stated the acquisition "will allow us to leverage the strengths of both our organizations to positively impact healthcare for communities across the U.S."

The companies indicated that patients and providers will benefit from broader access to Labcorp’s comprehensive testing services, specialty testing menu, data analytics and digital tools following the completion of the deal.

Both organizations have committed to ensuring a smooth transition that maintains continuity of services for patients, hospitals, clinicians and clients.

The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in the fourth quarter of 2025. No changes in operations or services will occur until that time.

This relationship follows similar strategic arrangements Labcorp has established with other local and regional health systems to enhance services for patients and providers, according to the press release statement.

Community Health Systems operates 70 affiliated hospitals with more than 10,000 beds across 14 states, while Labcorp serves clients in approximately 100 countries with nearly 70,000 employees. With a market capitalization of $516 million, CYH currently appears undervalued according to InvestingPro analysis, which offers comprehensive valuation metrics and 8 additional key insights about the company’s financial health and market position through its detailed Pro Research Report.

In other recent news, Community Health Systems reported its Q1 2025 earnings, slightly exceeding expectations. The company posted an earnings per share (EPS) of -$0.03, compared to the forecasted -$0.04, and achieved a revenue of $3.16 billion, surpassing the anticipated $3.1 billion. In the realm of credit ratings, S&P Global Ratings upgraded Community Health Systems’ rating to ’CCC+’ from ’SD’, while maintaining a negative outlook. This upgrade reflects the company’s improved operational performance, including increased adjusted admissions and net revenue per admission.

Earlier, Community Health Systems had been downgraded to ’SD’ by S&P Global Ratings due to the repurchase of a significant portion of its senior unsecured notes. These notes, with an outstanding value of approximately $625 million, were repurchased at $750 per $1,000, leading to the downgrade. S&P Global Ratings had categorized this action as a selective default under their criteria. The agency plans to raise the issuer credit rating back to ’CCC+’ and assign a negative outlook in the near future.

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