Food testing company Covance Food Solutions is to be sold in a deal worth $670 million.
LabCorp, which inherited the business as part of its $6.1 billion acquisition of Covance in 2015, is selling it to Luxembourg-based Eurofins Scientific.
It is thought the acquisition will boost Eurofins’ position in the United States, United Kingdom and Singapore through an integrated network of facilities. In 2017, Covance Food Solutions recorded pro-forma revenue of approximately $150 million, while parent company LabCorp last week posted first-quarter revenue of $2.8 billion.
David P King, chief executive officer of LabCorp, said: “Covance Food Solutions is a great business and has benefitted substantially from its ownership by Covance and then LabCorp. Over the three years LabCorp has owned Covance, it has become clear that the greatest opportunities for us to create lasting value come from the core lab business, the Contract Research Organization (CRO), and the enterprise-wide combination that is beyond lab and beyond CRO.
“The sale of Covance Food Solutions to Eurofins allows us 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.”
According to the two companies, over the last three years, Covance Food Solutions has increased its technical capabilities, broadened its geographic scope, and enriched its suite of customer-focused solutions for the global food, beverage, dietary supplement and agricultural industries.
Eurofins claimed the acquisition would be complementary to its existing geographies and services.
Eurofins chief executive officer Gilles Martin added: “Covance Food Solutions has a strong track record of success offering tailored testing and product design solutions for the food industry and enjoys outstanding credibility with its customers. This, combined with complementary service offerings and geographic footprint, made it an ideal fit with Eurofins’ existing offerings and supports our mission to deliver the most innovative and highest quality food testing and development services in the world.”
The transaction is expected to close in the third quarter of 2018.
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