Ophaco Sells BioReference Health Unit for Up to $872 Million
Translated & summarized from Bizportal by baba
Ophaco is selling its subsidiary BioReference Health to Labcorp for up to $872 million, a deal that represents a significant portion of Ophaco's market value. The sale includes various laboratory testing services and the 4Kscore prostate cancer risk test. Labcorp expects the acquired operations to generate $250 million in annual revenue, with the deal reflecting a revenue multiple of around 2.9 to 3.5.
The story in 6 lines · by baba
- Ophaco will sell its BioReference Health subsidiary to Labcorp for up to $872 million.
- The deal includes clinical medicine, women's health, urology, and correctional facility testing services.
- The 4Kscore prostate cancer risk blood test is a key asset being acquired by Labcorp.
- The base payment of $722 million represents about 70% of Ophaco's market value before the announcement.
- Labcorp anticipates the acquired operations will generate approximately $250 million in annual revenue.
- The transaction is expected to boost Ophaco's stock price significantly.
Ophaco, a biopharmaceutical and diagnostics company traded on both the Tel Aviv and Nasdaq stock exchanges, announced a significant asset sale of its subsidiary, BioReference Health, to the American laboratory giant Labcorp. The deal is expected to bring Ophaco $722 million in cash upon completion, with an additional $150 million contingent on the performance of certain sold assets, potentially totaling $872 million.
This transaction is substantial for Ophaco, as the base payment alone represents approximately 70% of its market value prior to the announcement. If the full contingent payment is realized, the total consideration would approach 85% of the company's pre-announcement market capitalization of about $1.02 billion on Nasdaq.
Labcorp will acquire BioReference's laboratory operations in clinical medicine, women's health, urology, and correctional facility testing. The acquisition also includes operational assets such as over 80 patient service centers. A key component of the deal is the acquisition of the 4Kscore blood test, which assesses the risk of aggressive prostate cancer and aids in biopsy decisions. This FDA-approved test is slated for broader accessibility through Labcorp's national network.
Ophaco will see a reduction in its revenue stream as it is selling income-generating operations. Labcorp projects the acquired business to generate around $250 million in revenue in its first year post-acquisition. The base transaction reflects a revenue multiple of approximately 2.9, potentially rising to 3.5 with the full contingent payment. However, the profitability of the divested operations has not been disclosed, making it difficult to assess the operating profit multiple paid by Labcorp.
