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LabCorp to Acquire Chiltern for $1.2 Billion

By Barry Teater, NCBiotech Writer

Burlington-based LabCorp, the global life sciences company built on laboratory diagnostic testing, continues to beef up its capacity in the clinical research industry.

LabCorp will acquire Chiltern International, a privately held contract research organization (CRO) that has its North American headquarters in Wilmington, for about $1.2 billion.

The acquisition will boost LabCorp’s ability to commercialize new therapeutics, diagnostics and medical devices for clients of its Covance unit, a large CRO that it acquired in 2015 for $6.2 billion.

LabCorp said in a news release that the all-cash deal is expected to close in the fourth quarter of this year. When it does, Chiltern will become part of the Covance business.

Extending CRO advantages

"This acquisition strengthens our position as a leading life sciences company that delivers innovative diagnostics and drug-development solutions to improve health and improve lives," said David King, chairman and CEO of LabCorp. "Our acquisition of Covance has demonstrated the value of combining diagnostic and CRO capabilities, expertise, data and leadership. The addition of Chiltern furthers our strategy and will provide us with enhanced capabilities across a broader client base as we continue to innovate and grow."

Chiltern provides clinical services in multiple therapeutic areas for biopharmaceutical and medical device clients, particularly emerging-to-mid market companies. Services include clinical development, medical and scientific affairs, data and analysis, pharmacovigilance and strategic regulatory services.

The company said it has conducted more than 1,800 studies across 87 countries in the last five years.

Chiltern has forecasted 2017 revenue of $550 million and earnings of $95 million before interest, taxes, depreciation and amortization.

"Joining LabCorp and Covance will allow Chiltern to expand its collaborative approach to bring better, more personalized therapies to market for patients every day," said Jim Esinhart, Ph.D., CEO of Chiltern. "Customers will benefit from the expanded capabilities this provides, and our employees will have a greater opportunity to propel research into the future with strong, supportive partners."

Since LabCorp acquired Covance it has grown its CRO business to nearly $3 billion in annual revenue, said John Ratliff, CEO of Covance.

"We now join with Chiltern to create a market-leading CRO, with more than 20,000 talented employees around the world,” he said. “The addition enhances Covance's offerings as a major partner serving the top 20 biopharma segment and expands our current offering to include a dedicated focus on the high-growth emerging and mid-market biopharma segments.”

Covering all stages of drug development

LabCorp said the acquisition will complement Covance’s strength in late-phase drug development by adding Chiltern’s expertise in early clinical development. Chiltern will also contribute specialty capabilities in oncology and medical devices.

Chiltern was founded in 1982 and has global headquarters in Slough, a town in Berkshire, England, about 20 miles west of central London.

The company has more than 4,500 employees around the world, including an undisclosed number at its Wilmington headquarters and at a site in Cary. A company spokesperson declined to say if the acquisition would affect the North Carolina employees.

The addition of Chiltern’s workforce to Covance’s will give the combined company about 11,100 employees in the Americas; 7,100 employees in Europe, the Middle East and Africa; and 2,400 employees in Asia-Pacific.

Overall, LabCorp will employ more than 56,000 people worldwide after the Chiltern acquisition. The company had net revenues of nearly $9.5 billion in 2016.

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