LabCorp secures new credit citing acquisitions as a motivation

Contract testing services supplier LabCorp has secured a credit facility with the Bank of America, citing capital expenditures and acquisitions among the potential uses of the funds.

News of the new agreement – which is worth a total $1bn (EUR765m) – follows just days after LabCorp completed its long sought acquisition of UK DNA testing services group Orchid Cellmark.

LabCorp said: “The new facility will be used for general corporate purposes, including working capital, capital expenditures, acquisitions, funding of share repurchases and other payments, and repayment of all amounts outstanding under the Company’s previous revolving credit facility and term loans.”

This suggests that more acquisitions may be in store in 2012, which would certainly fit with LabCorp’s stated aim of the diversification of its contract testing business in order to reduce its reliance on a few key customers in the pharmaceutical and biopharmaceutical sector.

With the completion of the Orchid deal LabCorp ends the year with two new divisions, the UK firm and Clearstone Central Labs which it bought in June.