CAMBRIDGE, Mass.--(BUSINESS WIRE)--Genzyme
Corporation (Nasdaq: GENZ) today announced that it has entered into
an asset purchase agreement under which Laboratory Corporation of
America Holdings (LabCorp) will acquire Genzyme Genetics for $925
million in cash.
“This transaction demonstrates the strategic value of Genzyme Genetics
and the strong franchise we’ve built over a twenty year period”
Under the terms of the agreement, LabCorp will purchase the business in
its entirety, including all testing services, technology, intellectual
property rights, and its nine testing laboratories. LabCorp is committed
to offer employment to the unit’s approximately 1900 employees upon
closing, including senior management. The agreement is subject to
customary closing conditions, including the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, with the goal of closing before the end of the
year.
“This transaction demonstrates the strategic value of Genzyme Genetics
and the strong franchise we’ve built over a twenty year period,” said
Henri A. Termeer, chairman and chief executive officer of Genzyme
Corporation. “It also shows how our management team is uniquely
positioned to unlock the underappreciated value of Genzyme’s diverse
businesses for shareholders. The completion of this sale allows us to
focus our resources on core growth areas and create stronger returns on
invested capital.”
Genzyme announced in May that it would seek strategic alternatives for
three units as part of a five-part plan to increase shareholder value.
The plan builds on the robust set of operational, organizational and
board changes made over the past year to strengthen the company. Plans
to divest the two other Genzyme business units, Diagnostic Products and
Pharmaceutical intermediates, remain on track. Proceeds from these
transactions may be used to finance the second half of the company’s $2
billion stock buyback to be completed by May 2011.
Genzyme Genetics is an industry leading provider of reproductive and
oncology testing in the United States, specializing in esoteric testing,
with nine laboratories performing more than a million tests a year. The
business, which also has the largest nationwide network of
board-certified genetic counselors, had revenue of $371 million in 2009.
LabCorp is one of the nation’s largest laboratory testing companies
specializing in routine testing, with 38 primary testing locations and
more than 1,500 patient service centers.
The terms achieved with LabCorp meet the three foundational requirements
Genzyme established for divestitures: (1) to recognize the value of
employees with appropriate treatment as part of the transaction, (2) to
create a future for Genzyme Genetics in which customers continue to be
served well, and (3) to create value for Genzyme shareholders.
Mr. Termeer continued, “LabCorp is the right strategic partner for
Genzyme Genetics. LabCorp intends to invest in growing its operations.
The business will have the opportunity to continue to grow, serve its
customers and fulfill its potential to bring continued innovation to
important areas of the diagnostics field.”
Genzyme was advised by Credit Suisse and Goldman Sachs & Co on this
transaction. The company’s legal adviser was Ropes & Gray.
About Genzyme
One of the world's leading biotechnology companies, Genzyme is dedicated
to making a major positive impact on the lives of people with serious
diseases. Since 1981, the company has grown from a small start-up to a
diversified enterprise with more than 12,000 employees in locations
spanning the globe and 2009 revenues of $4.5 billion. In 2010, Genzyme
was named to the Fortune 500.
With many established products and services helping patients in
approximately 100 countries, Genzyme is a leader in the effort to
develop and apply the most advanced technologies in the life sciences.
The company's products and services are focused on rare inherited
disorders, kidney disease, orthopaedics, cancer, transplant and immune
disease. Genzyme's commitment to innovation continues today with a
substantial development program focused on these fields, as well as
cardiovascular disease, neurodegenerative diseases, and other areas of
unmet medical need.
This press release contains forward-looking statements, including the
statements regarding: the timing and potential benefits of the proposed
transaction; plans to focus on core growth areas and create stronger
returns on invested capital; Genzyme’s five-part plan to increase
shareholder value, the timing of divestitures of the Diagnostic Products
and Pharmaceutical intermediates businesses; plans for the proceeds of
the divestitures; and the timing of the $2 billion stock buyback
program. These statements are subject to risks and uncertainties that
could cause actual results to differ materially from those projected in
these forward-looking statements. These risks and uncertainties include,
among others, the possibility that certain closing conditions will not
be met; that the divestitures and stock buyback program do not occur in
the anticipated timeframes for any reason; that any or all of Genzyme’s
five-part plan to create shareholder value cannot be executed on or is
otherwise ineffective; and the risks and uncertainties described in
Genzyme's SEC reports filed under the Securities Exchange Act of 1934,
including the factors discussed under the caption "Risk Factors" in
Genzyme's Annual Report on Form 10-Q for the period ended June 20, 2010.
We caution investors not to place undue reliance on the forward-looking
statements contained in this document. These statements speak only as of
the date of this document, and we undertake no obligation to update or
revise the statements.