LabCorp 2014 Annual Report Download - page 7

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at www.labcorp.com as soon as practicable after such material is electronically filed with, or furnished to, the Securities and
Exchange Commission. Additionally, the Securities and Exchange Commission ("SEC") maintains an Internet Website at http://
www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the SEC, including the Company. The public may also read and copy any materials that the Company files with the SEC at
the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. Information on the operation of the Public Reference
Room may be obtained by calling the SEC at 1-800-SEC-0330.
The matters discussed in this "Business" section should be read in conjunction with the Consolidated Financial Statements
found under Item 8 of Part II of this annual report, which include additional financial information about the Company, including
segment information for each of the last three fiscal years regarding revenue, measures of profit and loss, and other important
financial information.
The Company is committed to providing the highest quality laboratory services to its clients in full compliance with all
applicable laws and regulations. The Company’s Code of Business Conduct and Ethics outlines ethics and compliance policies
adopted by the Company to meet this commitment. These policies apply to all employees of the Company as well as the Company’s
Board of Directors. The Code of Business Conduct and Ethics, as well as the Charters for the Audit, Compensation, Quality and
Compliance, and Nominating and Corporate Governance Committees of the Board of Directors, and the Company’s Corporate
Governance Guidelines, are posted on the Company’s Website www.labcorp.com. The Company has established a Compliance
Action hotline [phone]), which provides a confidential and anonymous method to report a possible violation of a LabCorp
compliance policy or procedure, or an applicable law or regulation; a HIPAA Privacy hotline [phone]), which provides
a confidential and anonymous method to report a possible violation of a HIPAA privacy, security or billing policy or procedure;
an Accounting hotline [phone]), which provides a confidential and anonymous method to report a possible violation of
internal accounting controls or auditing matters; and a global hotline [phone]), which provides a confidential and
anonymous method for non-US based employees to report, in local languages, a possible violation of LabCorp compliance policy
or procedure or applicable law or regulation.
Acquisition of Covance
On February, 19. 2015, the Company completed its acquisition of Covance a leading drug development services company and a
leader in nutritional analysis, for approximately $6.2 billion. 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 the consummation of
the acquisition. With the completion of this merger, former Covance stockholders own approximately15.5% of the outstanding
shares of the Company's stock.
In connection with the transaction, the Company initially put in place a $4.25 billion bridge loan, and has since secured permanent
financing, including a $1.0 billion 5 year term loan and $2.9 billion in long-term bonds, ranging from 5 years to 30 years. The
weighted average interest rate on the $3.9 billion of long-term debt is approximately 3.15%, while the average maturity is
approximately 12 years.
Covance, headquartered in Princeton, New Jersey, offers a wide range of early-stage and late-stage drug development services on
a worldwide basis primarily to the pharmaceutical and biotechnology industries. The Company believes that the Covance is one
of a few providers that are capable of providing comprehensive global drug development services. Covance maintains offices in
more than 30 countries.
Covance Drug Development's early development services include 1) preclinical services such as toxicology, nutritional chemistry
and food safety, pharmaceutical chemistry, lead optimization and translational services, and related services, as well as 2) clinical
pharmacology services such as first-in-human trials and early patient proof of concept studies. These services are provided across
multiple facilities in the United States, Europe, Asia and South America.
Covance Drug Development's late-stage development services include 1) central laboratory services, 2) clinical development
services such as Phase II through IV clinical studies and periapproval services, 3) market access services in support of customers’
reimbursement and health care economic consulting needs, and 4) clinical trial support services. These services are also provided
across multiple facilities in the United States, Europe and Asia.
The combination with Covance expands the Company's range of diagnostic offerings, and the Company believes that the combined
companies will deliver faster clinical trial enrollment, and drive incremental growth across both the clinical lab and drug
development businesses. The transaction will provide LabCorp with greater scale in the biopharmaceutical research and
development market, while enabling new sources of revenue, an expanded customer base, and a greater international presence.