Eurofins Announces the Successful Closing of the Acquisition of Covance Food Solutions

Eurofins Scientific, a global scientific leader in bioanalytical testing, announces the successful closing of the transaction to acquire Covance Food Solutions from LabCorp, a leading global life sciences company. Covance Food Solutions provides product integrity, food safety, product development and consulting solutions for end-use segments that span the life cycle of food, beverage and dietary supplement products.

Covance Food Solutions operates an integrated network of 12 facilities across the globe (9 in the U.S., 2 in the UK and 1 in Singapore). It 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. The acquisition price is US$670m 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 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 U.S., which is the largest food testing market in the world. Covance Food Solutions provides Eurofins the scale and scientific depth in the U.S. that it enjoys in Europe and brings its long-standing relationships with many of the largest U.S. food and beverage multinational corporations to the Eurofins Group. These clients will gain access to the unmatched technological portfolio and international network of Eurofins’ food testing laboratories worldwide. Synergetic top line growth effects are thus expected from cross selling to each organization’s clients which should contribute to creating sustainable shareholder value in the long-term.

Comment from Dr. Gilles Martin, Eurofins CEO: “We are extremely pleased to welcome Covance Food Solutions and its talented team to the Eurofins Group. Covance Food Solutions has been one of the pioneers in food testing in the U.S. and, like Eurofins, has continuously focused on innovation and offering the highest quality testing services in the industry. 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.”