Apparently Genzyme (Nasdaq:GENZ) is not adverse to all deals, just the current deal that Sanofi-aventis (NYSE:SNY) is offering. On Monday morning, Genzyme announced that it had reached an agreement to sell Genzyme Genetics to Laboratory Corporation (NYSE:LH) for $925 million in cash. It had been widely known that Genzyme was looking to sell some non-core businesses (including a diagnostics product and pharmaceutical intermediaries), and Genyzme did not waste a lot of time finding a buyer.
A Buyer's Market for Labs
Although this division goes by the name of "Genzyme Genetics", it is basically a laboratory testing business; one that has a rather strong brand in prenatal and hematopathology testing. Accordingly, it fits in pretty well with Lab Corp.'s stated interest in expanding its genetic and esoteric testing business.
Genzyme made the unfortunate decision to sell in the middle of a tough market. Labs are struggling with weak volume as doctor visits are down and people seem to be foregoing health care during the current economic troubles. With weak volume and strong competition from major players like Lab Corp., Quest (NYSE:DGX) and Bio-Reference Laboratories (Nasdaq:BRLI), a lot of labs are choosing to sell out and routine deals are going for about 1.5x sales.
Click below for the full article:
http://stocks.investopedia.com/stock-analysis/2010/Lab-Corp-And-Genzyme-Find-Some-Common-Ground-GENZ-LH-SNY-DGX-BRLI-LMNX-GXDX0914.aspx
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