Labcorp (LH) Inks Asset Acquisition Deal With Legacy Health
Labcorp LH entered into an agreement with Legacy Health to acquire select assets of its outreach laboratory business, including laboratory facilities and equipment. Legacy Health will continue to maintain ownership and licensure of its hospital laboratories and retain ownership of its central lab building at Holladay Park in Northeast Portland.
The comprehensive laboratory relationship will allow Labcorp to bring forth its leading diagnostics capabilities and related support services to patients across Legacy Health's service area.
About Legacy Health
The Oregon-based nonprofit health-care system, Legacy Health provides comprehensive services across the Portland and Vancouver metro area and the mid-Willamette Valley. It consists of six primary-care hospitals, a children's hospital, a 24-hour mental and behavioral health services center and more than 70 primary care, specialty and urgent care clinics.
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Legacy Health continuously seeks to improve both the quality of care and the health of the communities it serves. Partnerships with mission-driven organizations like Labcorp will allow its patients and providers to benefit from the improvements and innovations.
More in the News
Through a long-term agreement, Labcorp will additionally provide staffing and leadership, scientific expertise, analytics, supply chain services and laboratory support to Legacy Health’s inpatient hospital laboratories. The health system’s longstanding history in the region will aid Labcorp's capabilities to bring expanded offerings to communities throughout Oregon and Southwest Washington.
The transaction is expected to close in late 2023, subject to customary closing conditions and applicable regulatory approvals. However, the terms of the transactions were not disclosed.
Industry Prospects
Per a research report, the global clinical laboratory service market was valued at $217.5 billion in 2022 and is expected to witness a CAGR of 3.2% by 2030.
Strategic Deals to Drive Growth
On the first-quarter 2023 earnings call, Labcorp updated that its pipeline for hospital and local lab acquisition and investment remains robust. Strategic partnerships with Ascension Health System and RWJ Barnabas Health solidify Labcorp’s ability to generate growth through future health care system partnerships.
Last month, LH announced a strategic collaboration with Forge Biologics for gene therapy development and manufacturing. Prior to that, the company entered into an agreement with Providence to acquire select assets of Providence Oregon's outreach laboratory business.
In addition, the company announced an expansion of its clinical laboratory testing capabilities in Japan, through an expansion of CB Trial Laboratory. The central laboratory is co-managed by Labcorp Drug Development and BML, a leading Japanese provider of clinical laboratory testing services.
Price Performance
In the past six months, shares of Labcorp have declined 15.4% against the industry’s 11.2% growth.
Zacks Rank and Other Key Picks
LH currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the overall healthcare sector are Haemonetics HAE, Zimmer Biomet ZBH and SiBone SIBN. While Haemonetics sports a Zacks Rank #1 (Strong Buy), Zimmer Biomet and SiBone each carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics’ stock has risen 35.4% in the past year. The Zacks Consensus Estimate for Haemonetics’ earnings per share (EPS) has increased from $3.55 to $3.56 for fiscal 2024 and remained constant at $3.96 for fiscal 2025 in the past 30 days.
HAE’s earnings beat estimates in all the trailing four quarters, the average surprise being 12.21%. In the last reported quarter, the company registered an earnings surprise of 13.24%.
The Zacks Consensus Estimate for Zimmer Biomet’s 2023 EPS has remained constant at $7.45 in the past 30 days. Shares of the company have gained 40.3% in the past year against the industry’s 20.6% decline.
ZBH’s earnings beat estimates in all the trailing four quarters, the average surprise being 7.38%. In the last reported quarter, the company recorded an earnings surprise of 13.86%.
The Zacks Consensus Estimate for SiBone’s 2023 loss per share has narrowed from $1.44 to $1.42 in the past 30 days. SIBN shares have gained 124.2% in the past year compared with the industry’s 14.8% growth.
SiBone’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 11.11%. In the last reported quarter, the company recorded an earnings surprise of 21.95%.
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Laboratory Corporation of America Holdings (LH) : Free Stock Analysis Report
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