Invitae Enters into Agreement with Labcorp for Sale of Business

Rhea-AI Summary

Invitae, a leading medical genetics company, has entered into an agreement with Labcorp for the sale of its business. Labcorp, a global leader in laboratory services, has been selected as the winning bidder in a court-supervised sale process under Section 363 of the U.S. Bankruptcy Code. The $239 million cash bid includes the acquisition of substantially all of Invitae's assets, ensuring business continuity for customers, partners, and employees. The sale is subject to court and regulatory approvals, with completion expected in the third quarter of 2024.

Insights

Financial Analyst

Labcorp's acquisition of Invitae's assets for $239 million represents a pivotal event that restructures the competitive landscape in the medical diagnostics space. The cash bid by Labcorp, a heavyweight in laboratory services, not only signifies a consolidation within the industry but also may signal a strategic shift towards genetic testing services.

For investors, the immediate implication is the liquidity infusion into Invitae, which is undergoing financial restructuring. This deal could be a harbinger for pending operational changes and potential synergies. The purchase price should also be compared against the book value of the assets acquired to assess the fairness of the transaction. From a long-term investment perspective, it is essential to monitor how Labcorp integrates these assets and whether the acquisition will lead to increased market share and revenue growth within the genetic testing market, a sector poised for expansion due to technological advancements and increasing healthcare personalization.

Legal Expert

The sale process under Section 363 of the U.S. Bankruptcy Code is a legal mechanism that allows a financially distressed company to sell its assets quickly and free of any liens or encumbrances. This mechanism is beneficial for both the buyer and the seller. Labcorp's acquisition is subject to court and regulatory approvals and the details of such transactions are critical for stakeholders.

Investors should note that the deal is subjected to intense scrutiny by the court to ensure the sale is conducted fairly and yields the highest value for the creditors. Moreover, regulatory approvals will likely check that the acquisition does not raise anti-competition concerns. It's of utmost importance to understand that any hindrance in these approvals could delay or jeopardize the transaction, potentially affecting Invitae's financial restructuring timeline and Labcorp's strategic agendas.

Medical Industry Analyst

The medical genetics firm Invitae, now under Labcorp's umbrella, could benefit from the latter's established infrastructure, potentially expanding its reach and efficiency in delivering genetic testing services. Labcorp's global presence and robust operational capabilities could enhance Invitae's product distribution and customer access.

Analyzing this from an industry perspective, the transaction could drive innovation through the pooling of resources and expertise. This consolidation may lead to a more dominant position in the market, possibly impacting pricing power and investment in research and development. Stakeholders should track post-acquisition performance closely to evaluate the integration's success and its impact on service quality, innovation and market competitiveness.

– Labcorp Selected as Winning Bidder in Court-Supervised Sale Process, Subject to Court and Regulatory Approvals –

– $239 Million Cash Bid Includes Acquisition of Substantially All of the Company's Assets, Ensuring Business Continuity for Customers, Partners and Employees –

SAN FRANCISCO, April 24, 2024 /PRNewswire/ -- Invitae (OTC:NVTA), a leading medical genetics company, announced that Labcorp (NYSE: LH), a global leader of innovative and comprehensive laboratory services, has been selected as the winning bidder in the Company's auction in its sale process under Section 363 of the U.S. Bankruptcy Code. Labcorp will acquire substantially all of the Company's assets on a going concern basis for $239 million in cash consideration, plus other non-cash consideration.

"The agreement with Labcorp marks a significant step in our financial restructuring and supports our efforts to continue to deliver innovative and industry leading products and services for healthcare," said Ken Knight, president and chief executive officer of Invitae.

The hearing to approve the sale is currently scheduled for May 6, 2024. With Court approval, as well as customary regulatory approvals and closing conditions, Labcorp and Invitae anticipate completing the sale process in the third quarter of 2024.

Invitae is advised in this matter by Kirkland & Ellis LLP as legal counsel, Moelis & Company LLC as investment banker, and FTI Consulting, Inc. as financial and communications advisor. 

About Invitae
Invitae (OTC: NVTA) is a leading medical genetics company trusted by millions of patients and their providers to deliver timely genetic information using digital technology. We aim to provide accurate and actionable answers to strengthen medical decision-making for individuals and their families. Invitae's genetics experts apply a rigorous approach to data and research, serving as the foundation of their mission to bring comprehensive genetic information into mainstream medicine to improve healthcare for billions of people.

To learn more, visit invitae.com and follow for updates on LinkedIn, X, Instagram, and Facebook @Invitae.

About Labcorp
Labcorp (NYSE: LH) is a global leader of innovative and comprehensive laboratory services that helps doctors, hospitals, pharmaceutical companies, researchers and patients make clear and confident decisions. We provide insights and advance science to improve health and improve lives through our unparalleled diagnostics and drug development laboratory capabilities. The company's more than 67,000 employees serve clients in approximately 100 countries, provided support for 84% of the new drugs and therapeutic products approved in 2023 by the FDA, and performed more than 600 million tests for patients around the world. Learn more about us at www.labcorp.com.

Safe Harbor Statements
Certain statements made in this press release, including, but not limited to, statements about Invitae's continued operation of the business as "debtors-in-possession"; Invitae's ability to consummate the planned sale of the business pursuant to the chapter 11 case; Invitae's ability to pay its current obligations when due and satisfy its continuing obligations, including, but not limited to, employee benefits and wages, vendors and suppliers of goods and services, and insurance and tax obligations; Invitae's expectation that the transactions contemplated by the Transaction Support Agreement ("TSA") and the chapter 11 cases are consummated by the Bankruptcy Court according to the terms outlined in the TSA, and that the transactions result in significant reduction of its debt balance; and any assumptions underlying any of the foregoing may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially and reported results should not be considered as an indication of future performance. These risks and uncertainties include, but are not limited to: risks and uncertainties regarding Invitae's ability to successfully consummate and complete a plan under chapter 11 or any strategic or financial alternative as well as Invitae's ability to implement and realize any anticipated benefits associated with any alternative that may be pursued, including the asset sales and wind down of operations; Invitae's ability to continue operating in the ordinary course while the chapter 11 cases are pending; potential adverse effects of the chapter 11 cases on Invitae's business, financial condition, liquidity and results of operations; Invitae's ability to obtain timely approval by the Bankruptcy Court with respect to motions filed in the chapter 11 cases; objections to Invitae's recapitalization process or other pleadings filed with the Bankruptcy Court that could protract the chapter 11 cases; employee attrition and Invitae's ability to retain senior management and other key personnel due to the distractions and uncertainties caused by the chapter 11 cases; Invitae's ability to improve its liquidity and long-term capital structure and to address its debt service obligations through the restructuring; Invitae's ability to comply with the restrictions imposed by the terms and conditions of the potential financing arrangements; Invitae's ability to effectively implement its strategic initiatives; Invitae's liquidity needs to operate its business and execute its strategy, and related use of cash; Invitae's ability to maintain relationships with suppliers, customers, employees, regulatory authorities and other third parties as a result of the chapter 11 cases; the effects of the restructuring and the chapter 11 cases on Invitae and on the interests of various constituents, including holders of Invitae's common stock; the Bankruptcy Court's rulings in the chapter 11 cases, including approvals related to the terms and conditions of any plan under chapter 11, the agreement with Labcorp  and the outcome of the chapter 11 cases, generally; the length of time that Invitae will operate under chapter 11 protection and the continued availability of operating capital during the pendency of the chapter 11 cases; risks associated with third-party motions in the chapter 11 cases, which may interfere with Invitae's ability to consummate a plan under chapter 11 or an alternative restructuring; increased administrative and legal costs related to the chapter 11 process; other litigation and inherent risks involved in a bankruptcy process; Invitae's public securities' potential liquidity and trading; any impact resulting from the delisting of its common stock from the New York Stock Exchange and trading instead on the OTC Pink Marketplace; and the other risks and uncertainties disclosed in Invitae's annual and quarterly periodic reports and other documents filed with the U.S. Securities and Exchange Commission. Additionally, there can be no assurances that the sale of the business will receive regulatory approval or that any sale will be successfully consummated. Forward-looking statements speak only as of the date they are made. Invitae undertakes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise, except as required by law.

 

Invitae Contacts:

Investor Relations
Hoki Luk 
ir@invitae.com 

Public Relations
Amy Sands Hadsock
pr@invitae.com 

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/invitae-enters-into-agreement-with-labcorp-for-sale-of-business-302126847.html

SOURCE Invitae Corporation

FAQ

What is the significance of the agreement between Invitae and Labcorp?

The agreement marks a significant step in Invitae's financial restructuring and supports their efforts to continue delivering innovative products and services for healthcare.

Who is the winning bidder in the court-supervised sale process?

Labcorp has been selected as the winning bidder in the sale process for Invitae's business.

What is the cash consideration for the acquisition of Invitae's assets by Labcorp?

Labcorp will acquire substantially all of Invitae's assets for $239 million in cash consideration, plus other non-cash consideration.

When is the hearing scheduled for the approval of the sale?

The hearing to approve the sale is currently scheduled for May 6, 2024.

Who is advising Invitae in this sale process?

Invitae is advised by Kirkland & Ellis LLP as legal counsel, Moelis & Company as investment banker, and FTI Consulting, Inc. as financial and communications advisor.