Labcorp to acquire Invitae assets for $239 million

SAN FRANCISCO – Medical genetics company Invitae (OTC:) Corporation (OTC:NVTA) announced that Labcorp (NYSE:LH) has won a bid to acquire substantially all of its assets for $239 million in cash. The acquisition is part of Invitae's Section 363 sale process and is pending court and regulatory approval.

Integrated laboratory services provider Labcorp's cash bid is designed to ensure continuity for Invitae's customers, partners and employees. “This agreement with Labcorp marks an important step in our financial restructuring and supports our efforts to continue providing innovative and industry-leading products and services to healthcare,” said Ken Knight, Invitae President and CEO.

The sale also includes non-cash consideration and is subject to a court hearing scheduled for May 6, 2024.

Invitae currently operates as the debtor-in-possession and was advised on the transaction by Kirkland & Ellis LLP, Moelis (NYSE:) & Company LLC and FTI Consulting (NYSE:), Inc. The sale is expected to play a key role in reducing Invitae's debt and allowing the company to meet its obligations, including employee benefits and wages, during the restructuring process.

Labcorp has more than 67,000 employees and operates in approximately 100 countries, supporting 84% of new drugs approved by the FDA in 2023.

Investment Professional Insights

InvestingPro's latest financial metrics paint a challenging picture as Invitae Corporation (OTC: NVTA ) undergoes a restructuring process. As of the third quarter of 2023, the company's revenue in the past 12 months was $481.58 million, a decrease of 7.38% from the previous period. This contraction is also reflected in the quarterly data, with revenue falling 9.21% in the third quarter of 2023.

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However, the pressure on Invitae's financial position was evident in its operating income, with an adjusted loss of $485.58 million, resulting in an operating margin of -100.83%. The loss underscores the importance of Labcorp's (NYSE: LH) proposed acquisition as a potential lifeline for Invitae's continuity.

InvestingPro Tips recommends investors pay close attention to its next earnings date on May 2, 2024, to learn more about Invitae's financial trajectory and the impact of the acquisition. Additionally, with Invitae's stock currently trading at 12.38% of its 52-week high, investors may be weighing post-acquisition risks and recovery potential.

For those looking for deeper analysis and more InvestingPro tips, please consider subscribing to InvestingPro.There are other tips on the platform which can be obtained at a discount using a coupon code PRONEWS24 Enjoy an additional 10% discount on yearly or annual Pro and Pro+ subscriptions.

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