GREENFIELD — Covance, which bought Eli Lilly and Co.’s Greenfield Labs six years ago, has agreed to be acquired by a competitor in a move that will create a giant in the health-care diagnostics industry.
LabCorp of Burlington, North Carolina, and Covance, based in New Jersey, agreed to a deal announced Monday worth $6.1 billion.
Covance has about 600 employees at Greenfield Laboratories. It was unclear what impact the deal will have on employees here and at Covance’s dozens of other facilities around the world. The companies said Covance will continue to operate from its New Jersey headquarters.
The bid to purchase Covance, which is expected to close sometime in the first quarter next year if approved by shareholders and regulators, is the latest in a spate of acquisitions by LabCorp as companies in the health-care industry jockey for positions that strengthen them in the marketplace.
LabCorp, which pioneered genome and forensic DNA testing, acquired National Genetics Institute, ViroMed Laboratories and DIANON Pathology in a four-year span beginning in 2000, and from 2005 to 2011, the company purchased seven additional laboratories and testing enterprises, according to its website.
LabCorp says that it now processes and tests some 470,000 specimens a day for clients that include physicians’ offices, hospitals, biotech and pharmaceutical companies.
Details of the deal include LabCorp’s payment of $105.12 per Covance share in cash and LabCorp shares, representing a 32 percent premium over Friday’s closing price of Covance stock.
On Monday, Covance shares closed up more than 25 percent, at $100.57. LabCorp’s share price was down by more than 7 percent, closing at $101.23.
David King, LabCorp chairman and CEO, will run the new enterprise, while Joe Herring will continue to lead the Covance division in Princeton, New Jersey.
In a joint news release, the companies touted an enhanced financial profile with greater revenue growth and cash flow; and an expanded customer base and revenue mix that “creates world’s leading health-care diagnostics company.”
Covance employs a worldwide workforce of more than 12,000 in 60 countries, including the employees here.
The company is a top-five provider of clinical trial management services and a market leader in nutritional chemistry, according to the company release. After buying Greenfield Labs from Lilly for $50 million, it took over testing of Lilly’s compounds.
According to documents summarizing the acquisition, Covance brings a significant pharmaceutical and biotech component to LabCorp, with 97 percent of Covance’s revenue generated in that sector.
Thirty percent of LabCorp’s revenues come from commercial clients, and 46 percent originate from the managed care sector. Medicare/Medicaid and private patients make up the rest.
LabCorp generates most of its revenues in the United States; 46 percent of Covance’s revenues are generated here, which will better position the company globally, the report states.
Representatives from both companies did not return calls seeking comment on Monday.
While he had not spoken to company officials about the acquisition, Skip Kuker, executive director of the Hancock Economic Development Council, said it was not uncommon these days for companies to seek and acquire other good-value companies.
“This could quite possibly be a very good thing for our community,” Kuker said.