NEW YORK – Enzo Biochem said after the close of markets on Thursday that it has entered an agreement to sell the assets of its clinical laboratory division to Laboratory Corporation of America. Enzo disclosed in a filing with the US Securities and Exchange Commission that it is selling the division for roughly $146 million in cash.
The sale is part of a restructuring initiative Enzo launched in 2022 to focus on its life science segment, which sells products and services for drug discovery and research applications.
"Completion of the sale will position Enzo to assess and execute on further actions to increase shareholder value and advance our global leadership within the life sciences sector," Enzo CEO Hamid Erfanian said in a statement. "With proven expertise in clinical laboratory services and products, Labcorp is perfectly positioned to bring these operations to new levels of momentum and success."
"Enzo Clinical Labs is renowned for high-quality testing and expert customer focus, and we look forward to integrating these capabilities through a smooth and seamless transition of services while maintaining a presence on Long Island with testing and service teams," said Bill Haas, senior VP of Labcorp Diagnostic’s Northeast division. "This investment bolsters our commitment to the New York Tristate healthcare communities, and we are confident that Enzo Clinical Labs patients and providers will have a combined experience that exceeds their laboratory needs."
In the first quarter of fiscal year 2023, Enzo's lab division reported $11.2 million in revenues, down 43 percent from $19.7 million in Q1 2022 due to a drop in COVID-19 testing revenues. Excluding COVID-19 testing, lab revenues were up 4 percent year over year with non-COVID-19 test volumes up 3 percent year over year.
Jefferies served as the exclusive financial adviser, and McDermott Will & Emery served as legal adviser to Enzo, and Evercore and Hogan Lovells served as advisers to Labcorp.
Completion of the sale is contingent on approval by Enzo's shareholders and other customary closing conditions. Enzo will seek shareholder approval at a special meeting of shareholders.
In Friday morning trading on the New York Stock Exchange, Enzo shares were up 85 percent to $2.20.