Eurofins Scientific, the global scientific provider of bioanalytical testing, has announced the successful closing of the transaction to acquire Covance Food Solutions from LabCorp, the global life sciences company.
The acquisition price is US$670m on a cash free debt free basis. This price includes the significant favourable tax benefits of an acquisition of assets in the US.
“Covance Food Solutions has been one of the pioneers in food testing in the US and, like Eurofins, has continuously focused on innovation and offering the highest quality testing services in the industry," said Dr Gilles Martin, Eurofins CEO.
Covance Food Solutions provides product integrity, food safety, product development and consulting solutions for end-use segments that span the lifecycle of food, beverage and dietary supplement products
"The opportunity to acquire such high-quality assets occur very rarely in the food testing industry. This unique transaction represents a clear milestone for Eurofins towards its 2020 objectives to build an unprecedented global, one of a kind testing platform with world-class infrastructure, science and IT solutions," Martin added.
Headquartered in Madison, Wisconsin, in the US, Covance Food Solutions employs approximately 850 staff and expects to generate revenues of approximately US$160m in 2018, with an EBITDA margin well in excess of Eurofins’ objectives.
Covance Food Solutions provides product integrity, food safety, product development and consulting solutions for end-use segments that span the lifecycle of food, beverage and dietary supplement products.
The company operates an integrated network of 12 facilities across the globe; nine in the US, two in the UK and one in Singapore.
As Eurofins and Covance Food Solutions have a complementary geographic footprint and service offering, no restructuring of either business is foreseen.
Covance Food Solutions will be consolidated in Eurofins’ accounts from August 1st 2018 and should be immediately margin and EPS accretive.
This acquisition significantly strengthens Eurofins’ food testing offering in the US, which is the largest food testing market in the world.
Covance Food Solutions provides Eurofins with the scale and scientific depth in the US that it enjoys in Europe and brings its long-standing relationships with many of the largest US food and beverage multinational corporations to the Eurofins Group.