Labcorp buys specialty drug testing lab company for $375M
Labcorp has completed its acquisition of an accredited specialty laboratory service group that conducts urinalysis for drug testing, healthcare and surveillance. The deal is worth $375 million.
In an announcement, the North Carolina-based healthcare diagnostics giant said it has taken control of Millennium Health, which has been operating in the specialty lab space for more than 15 years.
According to a filing with the U.S. Securities and Exchange Commission, the deal involves $245 million in cash up front, with another $130 million paid over time based on contingencies, mostly related to revenue growth.
The deal was first announced last month but officially closed last week. With the buyout, Labcorp said it will be able to expand its testing capabilities, as Millennium Health brings new testing options that help providers to monitor a patient’s use of illicit drugs and prescription medications.
Further, labs run by Millennium Health can also be used to improve pain management, helping patients to avoid addiction by monitoring the use of opioids and other drugs over time. Similarly, the company caters to those with serious mental health conditions and other chronic illnesses that may require the prescription of controlled substances.
Millennium will be fully integrated into Labcorp’s nationwide network of diagnostic labs, the company confirmed.
“The completion of this acquisition marks an important step in strengthening Labcorp’s toxicology capabilities and expanding access to these important testing services for patients across the country,” Andrea Throop, PhD, Head of Toxicology at Labcorp, said in a statement.
Expanded access to new tests
The company added that the urinalysis capabilities of Millennium Health will be enhanced as a result of Labcorp’s test ordering and delivery infrastructure and nationwide network of patient service centers.
“By bringing together Labcorp’s national scale, scientific expertise and digital capabilities with Millennium Health’s deep experience in toxicology testing and drug surveillance, we are well positioned to support healthcare providers with actionable information that helps improve patient care and outcomes,” Throop added.
Labcorp’s stock is up almost 18% since the takeover was announced, currently trading at $370.88 per share—a share price that represents an all-time high for the 48-year-old company.
In October, the company also announced another major buy, that of Opko Health, a clinical diagnostics firm that’s focused on women’s health and prostate cancer. That deal, which is still being finalized and approved by regulators, is worth $872 million.
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