CIT to buy Canada’s LAB Research
The takeover, which could be completed next week if cleared by the Canadian courts and LAB’s creditors, would establish CIT-LAB as a business with turnover of $97m (€70m) and an 800-strong workforce.
CIT declined to comment on the deal when contacted by Outsourcing-pharma.com.
However, in a press statement released late yesterday Jean-Francois Le Bigot, executive chairman of CIT and its holding company ABC which would make the proposed acquisition, said that LAB’s network of preclinical research facilities was the main driver for the deal..
“They [LAB’s facilities] provide general services in non-clinical assessment, but each has its own specialisation, such as primates in Canada, minipigs in Denmark or inhalation and ectotoxicology in Hungary.”
Dr Le Bigot went on to explain that: “The addition of LAB Research’s assets will create a global player at the service of the pharmaceutical, biotechnology and chemical industries.”
Strategic review
LAB has been trying to find a buyer since last October when it began a strategic review of operations in response to falling demand for preclinical development services.
At the time the firm said “2010 continued to be impacted by the overall reduction in global Research and Development spending for toxicology work and reduced pricing on new business contracted with our clients.”
The Laval-headquartered company also said it had come under considerable pricing pressure in North America from larger CROs which reduced its margins in the third quarter.
LAB came close to finding a buyer in February this year when it signed a non-binding letter for intent (LOI) with an unnamed US private equity group offering a $13m (€9.4m) takeover deal.
However this agreement fell apart a few weeks later after the US suitor said it was “no longer interested in completing the transaction.”
LAB’s main Canadian lender responded to this, and the resignation of LAB’s board, by obtaining an order appointing receivers under section 243 of the country’s bankruptcy and insolvency act.
The proposed CIT takeover is due to be completed on April 21.
