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LabCorp To Acquire Genzyme Genetics

Funds may go toward stock buyback

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By: Tim Wright

Editor-in-Chief, Contract Pharma

Following through on the divestiture strategy it announced last May, Genzyme Corp. will sell Genzyme Genetics to LabCorp for $925 million in cash. LabCorp will purchase the business in its entirety, including all testing services, technology, IP rights, and nine testing laboratories. LabCorp will offer employment to the unit’s approximately 1,900 employees upon closing, including senior management. The companies hope to close the deal before the end of the year.

“This transaction demonstrates the strategic value of Genzyme Genetics and the strong franchise we’ve built over a 20-year period,” said Henri A. Termeer, chairman and chief executive officer of Genzyme Corp. “It also shows how our management team is uniquely positioned to unlock the underappreciated value of Genzyme’s diverse businesses for shareholders. The completion of this sale allows us to focus our resources on core growth areas and create stronger returns on invested capital.”

Genzyme Genetics provides complex reproductive and oncology testing services. The business performs more than 1.5 million high-quality, high-clinical value tests annually with reported 2009 revenue of approximately $371 million.

Genzyme announced in May that it would seek strategic alternatives for three units — Genetics, Diagnostic Products and Pharmaceutical intermediates — as part of its plan to increase shareholder value. Plans to sell the two other units remain on track. Proceeds from these transactions may be used to finance the second half of the company’s $2 billion stock buyback to be completed by May 2011.

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