Labcorp to Purchase BioReference Diagnostic Operations from OPKO in $872M Deal
Labcorp Holdings Inc. (NYSE:LH) is expanding its diagnostic footprint through a deal to buy several laboratory divisions from OPKO Health Inc. (NASDAQ:OPK) for as much as $872 million. Under the arrangement, the buying company will provide $722 million in cash when the deal completes, subject to revenue adjustments. The agreement also features up to $150 million in performance-based payments linked to sales of the 4Kscore blood test, an FDA-cleared diagnostic tool used to assess aggressive prostate cancer risk prior to biopsies. The takeover encompasses clinical testing, women's health, urological services, corrections testing, and more than 80 patient service centers.
The sale allows OPKO Health Inc. to shed its diagnostic testing facilities and concentrate its financial resources on its primary biopharmaceutical pipeline. For Labcorp Holdings Inc., the transaction adds a business expected to generate roughly $250 million in revenue during its initial 12 months. Expanding these services into a nationwide network gives healthcare providers broader access to specialized diagnostic tools.
Both entities will run separately until the transaction satisfies standard closing requirements and secures regulatory clearances. Lazard is assisting the buyer with financial advice, while Piper Sandler is representing the seller. Shares of both companies moved higher following the disclosure.
Key points
- Labcorp Holdings Inc. agreed to acquire several BioReference Health testing units from OPKO Health Inc. for up to $872 million.
- The deal features $722 million in initial cash alongside as much as $150 million in potential earnout payments.
- The acquired assets are projected to deliver around $250 million in annual revenue throughout the first full year.
- OPKO Health Inc. is divesting the testing operations to focus on biopharmaceutical drug development.
Written by our AI from expert market sources across the web. It can contain mistakes: check the facts before acting on them. Write-ups powered by the free AI API at FreeTheAI.org
How we writeDisclaimerQuestions and answers
How much is Labcorp paying for OPKO Health's testing assets?
Labcorp will pay $722 million in upfront cash, with up to $150 million in extra payments tied to 4Kscore test revenues, bringing total potential consideration to $872 million.
Which BioReference businesses are included in the acquisition?
The transaction covers BioReference's clinical, women's health, urology, and corrections testing divisions, the 4Kscore prostate cancer test, and over 80 patient service locations.
Why is OPKO Health selling its diagnostic business?
OPKO Health is shedding its diagnostic testing divisions to streamline corporate operations and direct capital toward its core biopharmaceutical development pipeline.