LabCorp 2014 Annual Report Download - page 6

4
PART I
Item 1. BUSINESS
Laboratory Corporation of America® Holdings and its subsidiaries (the “Company”), headquartered in Burlington, North
Carolina, is the second largest independent clinical laboratory company in the United States based on 2014 net revenues. Since
the Company’s founding in 1971 as a Delaware corporation, it has grown into a national network of 39 primary laboratories and
approximately 1,750 patient service centers (“PSCs”) along with a network of branches and STAT laboratories (which are
laboratories that have the ability to perform certain core tests and report the results to the physician quickly). Through its national
network of laboratories, the Company offers a broad range of clinical laboratory tests that are used by the medical profession in
core testing, patient diagnosis, and in the monitoring and treatment of disease.
With over 36,000 employees worldwide, the Company processes tests on approximately 500,000 patient specimens daily and
has laboratory locations throughout the United States and other countries including, Belgium, Canada, China, Japan, Singapore,
the United Kingdom and the United Arab Emirates. Its clients include physicians, hospitals, managed care organizations,
governmental agencies, employers, pharmaceutical companies and other independent clinical laboratories that do not have the
breadth of its testing capabilities. The Company offers a menu of several hundred tests that are frequently used in general patient
care by physicians to establish or support a diagnosis, to monitor treatment or to search for an otherwise undiagnosed condition.
The most frequently-requested of these tests include blood chemistry analyses, urinalyses, blood cell counts, thyroid tests, Pap
tests, Hemoglobin A1C, PSA, STD tests (Ct, Ng, Tv, HIV), HCV tests, Vitamin D, microbiology cultures and procedures, and
alcohol and other substance-abuse tests. The Company performs this core group of tests in its major laboratories using sophisticated
and computerized instruments, with most results reported within 24 hours. In addition, the Company provides specialty testing
services in the areas of allergy, clinical trials, diagnostic genetics, women's health, cardiovascular disease, identity, forensics,
infectious disease, endocrinology, oncology, coagulation, occupational testing and pain management.
On November 2, 2014, the Company entered into a definitive merger agreement (“Merger Agreement”) to acquire Covance
Inc. (“Covance”) for approximately $6.2 billion in cash and LabCorp common stock, and the acquisition closed on February 19,
2015. Covance is a leading drug development services company providing a wide range of and product
development services on a worldwide basis primarily to the pharmaceutical and biotechnology industries. Covance also provides
laboratory testing services to the chemical, agrochemical and food industries. It has a global network of operations with offices
in more than 30 countries and trial activity in more than 100 countries. The Company believes Covance is one of the world’s
largest drug development services companies, based on annual net revenues, and one of a few that are capable of providing
comprehensive global development services.
Covance’s early development services include preclinical services, such as toxicology, nutritional chemistry and food safety,
pharmaceutical chemistry, lead optimization and translational services, and related services, as well as clinical pharmacology
services such as first-in-human trials and early patient proof of concept studies. Covance’s late-stage development services include
central laboratory services, clinical development services such as Phase II through IV clinical studies, market access services in
support of customers’ reimbursement and health care economic consulting needs, and clinical trial support services. Covance’s
services are provided across multiple facilities in the United States, Europe and Asia.
With the acquisition of Covance, which will operate as Covance Drug Development, the Company believes it has enhanced
the scale and depth of its capabilities as a trusted knowledge partner for stakeholders. The combination expands the Company’s
range of diagnostic offerings, and the Company believes that the combined company will deliver faster clinical trial enrollment
and drive incremental growth across both the clinical lab and drug development businesses. The transaction is expected to provide
the Company with greater scale in the biopharmaceutical research and development market, while creating new and
complementary revenue streams, expanding its customer base, and increasing its international presence.
Covance stockholders received $75.76 in cash and 0.2686 shares of the Company's common stock for each share of Covance
common stock they owned immediately prior to consummation of the acquisition. Former Covance stockholders own
approximately15.5% of the outstanding shares of the Company's stock following consummation of the transaction.
The description of the Company’s business set forth below generally reflects the operations of the Company prior to the
completion of the Covance acquisition, and the discussion of Covance Drug Development below does not cover all of the same
matters as are covered for the discussion of the Company’s historical business. References in this Item 1 to the “Company” do
not include Covance Drug Development, except where the circumstances clearly indicate otherwise.
The Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all
amendments to those reports are made available free of charge through the Investor Relations section of the Company’s Website