After hanging out the for sale sign and filing for bankruptcy earlier this year, the genetic testing provider Invitae has found a new home for its portfolio at Labcorp.
The two companies announced that the clinical diagnostics giant put forward the winning bid of $239 million during the court-supervised auction process, which is still pending final approval.
According to Invitae, the transaction covers “substantially all of the company’s assets”—though Labcorp described them as “select,” saying they would specifically help scale up its offerings in cancer testing and diagnostics for rare diseases.
Labcorp also noted that it was getting something of a good deal: after it’s slated to close in the third quarter of this year, the company said it expects the purchase to bring in $275 million to $300 million in annual revenue.
In March, Labcorp also put down $237.5 million for BioReference Health’s lab testing businesses, with their focus on reproductive and women’s health—which it said currently only generates about $100 million in yearly sales.
“The agreement with Labcorp marks a significant step in our financial restructuring and supports our efforts to continue to deliver innovative and industry-leading products and services for healthcare,” Invitae President and CEO Ken Knight said in a statement while the company said the move would help ensure continuity for customers, partners and employees.
In February, Invitae filed Chapter 11 after an 18-month business review process—following layoffs of more than 1,000 employees in July 2022, plus another round in late 2023 alongside the divestment of its Ciitizen health data platform, for estimated savings between $90 million and $100 million per year. But the company still had to address its debts of more than $1.6 billion and had yet to turn a profit since its 2012 founding.
Labcorp, meanwhile, also reported its earnings this week, posting $3.18 billion in sales during the first three months of the year. That amounts to 4.6% growth over the first quarter of 2023, or 6.7% when excluding declines in COVID-19 testing.
Labcorp also announced that it would implement a new holding company structure to more closely align with its branding. Starting in May, Labcorp Holdings Inc. will replace Laboratory Corporation of America Holdings as its publicly traded parent company. Its stock will continue to trade on the NYSE under the ticker LH.