DOW JONES NEWSWIRES
Laboratory Corp. of America Holdings (LH) has agreed to acquire Monogram Biosciences Inc. (MGRM), a maker of products to help guide and improve the treatment of serious diseases, for about $106.7 million, marking a return to LabCorp's acquisitive past.
Under the agreement, expected to close in the third quarter, LabCorp will pay $4.55 for each Monogram share, more than double Monday's closing price of $1.68. The stock is down 74% the past year and last traded above the takeover price in October.
The deal will also include some $50 million in Monogram debt that LabCorp will assume.
LabCorp, one of the world's largest diagnostic-testing companies, has relied on acquisitions to bolster its growth in recent years. And while the industry is not generally thought of as sensitive to changes in the economy, the credit crisis has made it tougher for companies to cut deals.
Doctors use Monogram's products to optimize treatment for their patients, while biopharmaceutical companies, such as Pfizer Inc. (PFE), use the technology to help develop new antiviral and cancer therapies and vaccines. "The potential oncology pipeline associated with this technology is a natural extension of LabCorp's existing oncology offerings for both clinical trials and commercial clients," a LabCorp release said.
LabCorp Chairman and Chief Executive David P. King said the deal will allow the company to build on Monogram's already strong sales, to "advance our leadership in infectious disease and cancer testing, companion diagnostics and personalized medicine."
The acquisition is expected to be reduce LabCorp 2009 earnings by 12 cents a share, including approximately four cents of transaction-related costs, but add to earnings in 2010.
LabCorp shares were recently down 24 cents at $65.47.
-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com