LAB Research, the financially troubled preclinical contract research organisation (CRO) put into receivership last February after the breakdown of negotiations for an unnamed US private equity group to acquire the company, has found another buyer in French counterpart CIT Safety & Health Research Company.
No financial details were released on the transaction, which the two companies say will create one of the top five preclinical CROs, with aggregate sales of US$97 million (€70 million) and 800 staff distributed across centres in France, Canada (LAB Research's home base), Denmark and Hungary.
CIT's holding company, Applied Biology Company (ABC), has agreed to acquire “substantially all” of Lab Research's assets, including its three facilities in Canada, Denmark and Hungary. The transaction is expected to close on or before 21 April 2011, subject to court as well as lender approval.
Until that time, Samson Belair/Deloitte & Touche, which is LAB Research's court-appointed receiver, will continue to supervise the company's business.
As Dr. Jean-François Le Bigot, executive chairman of CIT and ABC, pointed out, the three LAB Research centres provide general services in non-clinical assessment but have their own areas of specialisation, such as primates in Canada, minipigs in Denmark and inhalation and ecotoxicology in Hungary.
CIT's own expertise is in primates, carcinogenicity, reproductive toxicology and genomics studies. As such, Le Bigot noted, “each centre can offer quality service while providing clients with access to another facility in the CIT-LAB network when special expertise is needed”.
LAB Research announced last October that it had launched a strategic review process looking at all available alternatives such as financing, recapitalisation, strategic partnering, a merger or the sale of all or part of the company's assets.
As it explained when announcing its third-quarter results last November, LAB Research had been hit by a general reduction in global research and development spending on toxicology services, as well as by lower prices on new client contracts, especially in the North American market as large CROs drove prices down.
LAB Research reported a net loss of Can$2.64 million million for the third quarter of 2010 – the last available financial results – compared with a net loss of Can$1.70 million in the same quarter of 2009.