Charles River Laboratories Sells Off Former Inveresk Business Unit for $210M
Posted May 10, 2006 1:25 a.m. EDT
CARY, N.C. — Charles River Laboratories is selling off the clinical research organization it acquired less than two years ago in a $1.5 billion deal for Cary-based Inveresk.
Charles River (NYSE: CRL) said Wednesday it had sold the former Inveresk business group to Cincinnati-based
for $210 million in cash.
The former Inveresk group focuses on Phase II-IV clinical trials. The unit generates some $500 million in revenue and is profitable, according to Kendle and Charles River.
The decision to sell the unit was made in order that Charles River could focus on its core competencies, the company said.
"As a result of an evaluation of its strategic goals, the Company determined that the Phase II - IV Clinical Services business, at its current scale, while profitable, does not take advantage of the Company's core competencies, and believes that monetizing the Phase II - IV clinical assets and redeploying the resulting cash would be more beneficial to the long-term business, to customers and to shareholders," Charles River said in a statement.
The Cary operation will operate under the Kendle name, Kendle said.
"We are excited by this move, which is an important component of our overall growth strategy designed to significantly enhance our global competitive position and accelerate Kendle to a $500 million organization," said Candace Kendle, the chairman and chief executive officer. "Our customers will benefit from our strengthened global project leadership capability, expanded therapeutic expertise in the fastest-growing areas of clinical development and enhanced depth in North America and a number of key European markets. We look forward to completing the integration of our new operations into Kendle under our four service brands, and adding value for our customers through our combined organization."
Kendle (Nasdaq: KNDL) is a clinical research organization. The company said the deal would make it the fourth largest provider of Phase II-IV trials in the world.
The sale came as Charles River announced a first-quarter loss of $100 million.
The Phase II-IV Clinical Study Group still has more than 400 employees in North Carolina, including 350 in Cary and 130 in Wilmington, according to The Triangle Business Journal.
As of Dec. 31, Kendle employed 1,909 people.
Charles River is based in Wilmington, Ma.