Covance Food Solutions, which became part of LabCorp through its 2015 acquisition of Covance, offers a set of routine and specialized laboratory testing and consulting services focused on ensuring product safety, quality, and adherence to targeted internal and external standards for existing and in-development food, beverage, and supplement products.
Covance Food Solutions operates an integrated network of 12 facilities around the world (nine in the U.S., two in the U.K., and one in Asia) through harmonized processes and methods to deliver a comprehensive suite of product safety, integrity, and development services to its customers. It employs 850 staff and expects to generate revenues of approximately $160 million in 2018, with an EBITDA margin in excess of Eurofins’ objectives.
The agreed acquisition price is $670 million on a cash free debt free basis. This price includes the significant favorable tax benefits of an acquisition of assets in the U.S. As Eurofins and Covance Food Solutions have a complementary geographic footprint and service offering, no restructuring of either business is necessary and synergetic top line market effects are expected on cross selling to each organization’s clients in the regions where the other company is present.
“We are extremely pleased to welcome LabCorp’s Covance Food Solutions and its talented teams to the Eurofins Group,” said Eurofins CEO Dr. Gilles Martin. “Its competencies, reputation for scientific excellence and complementary geographic footprint, client focus and service offerings further strengthen Eurofins’ global offering in the very competitive food testing market. We look forward to working together as an integrated network of independent state-of-the-art laboratories providing our customers access to the full range of services and technological capabilities of the combined Group.”
LabCorp CEO David P. King, added, “Eurofins has an outstanding reputation in the food quality and development business, which will be enhanced with the addition of LabCorp’s Covance Food Solutions business, offering increased opportunities for its employees and more comprehensive services for customers. The sale of Covance Food Solutions to Eurofins allows LabCorp to focus on our core mission of improving health and improving lives, and at the same time better positions Covance Food Solutions to serve the global food supply industry.”