Biotech Values

[DewDiligence]

LH acquires CVD for $5.6B* in cash + stock:

http://online.wsj.com/articles/labcorp-agrees-to-buy-covance-for-about-5-94-billion-1415015125

…Covance shareholders would receive $75.76 in cash, and 0.2686 LabCorp shares, for each Covance share. The combined consideration of about $105.12 a share represents a premium of about 32% over Covance’s closing price Friday.

…Following the deal, the combined company will get 32% of its revenue from managed care, 29% from pharmaceutical and biotech companies, 22% from commercial customers, 12% from Medicare/Medicaid and 5% from private patients.

Mergers between diagnostic-testing companies and CROs are not common, so no one I know was expecting this particular transaction.

LH’s PR:
http://finance.yahoo.com/news/labcorp-acquire-covance-approximately-5-110000634.html

*Enterprise value net of CVD’s cash and debt.