Planned CRO spin-off Fortrea is worth around $570 million according to financial information shared by Labcorp.
The US contract services firm provided the update this month, explaining it has priced an offering of $570 million of senior secured notes in connection with the previously announced spin-off of Fortrea into a separate publicly traded company.
It also set a record date of June 20 and said that the distribution date will be June 30.
According to Labcorp, Fortrea intends to use the proceeds of the issuance of the notes being offered by it to fund a portion of an expected approximately $1,605 million cash distribution to Labcorp as partial consideration for the assets that will be contributed to Fortrea.
It also said the proceeds would go towards funding a portion of the fees and expenses related to this offering and transactions related to the spin-off.
Labcorp announced the spin-off last summer, commenting at the time that the move provides “strategic flexibility and operational focus” and allows it “to pursue specific market opportunities and better meet customer needs.”
And, in February this year, Labcorp shared more details, disclosing that the new organisation would be named Fortrea and would be made up of its clinical development and commercialization units.
The spin-off will leave Labcorp with its routine and esoteric labs, central labs and early development research lab operations.
Labcorp said that the split would allow itself and Fortrea to “invest in R&D and innovation to develop and launch diagnostic advancements globally in key areas including oncology, Alzheimer's, autoimmune and liver disease through organic and inorganic opportunities.”
When the spin-off is complete Fortrea will have a staff of 19,000 and provide Phase I through IV clinical trial management and commercialization solutions.
Labcorp also confirmed the new CRO will be led by ex-Quintiles chief Thomas Pike, who joined the firm as president and chief executive officer of its Drug Development Clinical Development business unit on January 9.
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