Eurofins Scientific has signed an agreement with LabCorp to acquire Covance Food Solutions, in a deal worth US$670 million. The transaction is expected to close in the third quarter of 2018, subject to the fulfillment of regulatory and customary closing conditions.
Covance Food Solutions, which became part of LabCorp through its 2015 acquisition of Covance, offers an extensive set of routine and specialized laboratory testing and consulting services focused on ensuring product safety, quality and adherence to targeted internal and external standards for existing and in-development food, beverage and supplement products.
Covance Food Solutions currently operates an integrated network of 12 facilities across the globe (9 in the US, 2 in the UK and 1 in Asia) through processes and methods to deliver “a comprehensive suite of product safety, integrity and development services to its customers.” It employs 850 staff and expects to generate revenues of approximately US$160 million in 2018, with an EBITDA margin more than Eurofins objectives.
The agreed acquisition price of US$670 million is on a cash free debt free basis. This price includes the significant favorable tax benefits of an acquisition of assets in the USA. As Eurofins and Covance Food Solutions have a complementary geographic footprint and service offering, no restructuring of either business is necessary and synergetic top-line market effects are expected on cross-selling to each organization’s clients in the regions where the other company is present. Based on Covance Food Solutions’ history of outstanding performance, the transaction should be immediately margin and EPS accretive for Eurofins after closing (by about 1 euro per share after financing costs). While the company accepts that this is a significant investment, Eurofins is well funded for it, and the asset is high quality. Beyond this specific opportunity, Eurofins intends to remain disciplined in its investments and conservative on its balance sheet structure and leverage.
Dr. Gilles Martin, Eurofins CEO said: “We are pleased to welcome LabCorp’s Covance Food Solutions and its talented teams to the Eurofins Group. Its competencies, reputation for scientific excellence and complementary geographic footprint, client focus and service offerings further strengthen Eurofins’ global offering in the very competitive food testing market. We look forward to working together as a network of independent laboratories providing our customers access to the full range of services and technological capabilities of the combined group.”
David P. King, LabCorp’s CEO also noted: “Eurofins has an outstanding reputation in the food quality and development business, which will be enhanced with the addition of LabCorp’s Covance Food Solutions business, offering increased opportunities for its employees and more comprehensive services for customers. The sale of Covance Food Solutions to Eurofins allows LabCorp 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.”
Source: Food Ingredients First
Consumer healthcare firm Haleon has appointed Tate & Lyle executive Dawn Allen as its new chief financial officer, effective 1 November 2024. Allen will succeed Tobias Hestler, who has decided to step down from the role, citing a long-term health condition, the company said.
The group said that the bottling line, which adds 6,500 square metres to the existing 60,700-square-metre site, is the next necessary stage in the company’s international development. The leading brand in Campari Group’s global sales, demand for the Italian bitter apéritif has grown by 500% in the last decade.
The partnership will see Coca-Cola adopt new technology to foster innovation and productivity globally. Through the deal, Coca-Cola has made a $1.1 billion commitment to the Microsoft Cloud and its generative AI capabilities.
