NEW YORK (GenomeWeb News) – After multiple delays and extensions of a cash tender offer, Laboratory Corporation of America's $85.4 million bid for Orchid Cellmark has been approved by the US Federal Trade Commission.
As part of an agreement reached with the FTC announced today, LabCorp will have to sell certain assets of Orchid related to its US government paternity business following the close of the purchase. LabCorp said that privately held DNA paternity testing firm DNA Diagnostics Center has agreed to purchase those assets for an undisclosed amount.
LabCorp's cash tender offer for all outstanding shares of Orchid is scheduled to expire on Dec. 9, 5:00 p.m. EST. As of Nov. 30, 5:00 p.m., EST shareholders of Orchid had validly tendered and not withdrawn 26,463,575 shares of Orchid common stock, including 56,631 shares tendered through notices of guaranteed delivery.
The shares tendered represent 88.2 percent of outstanding Orchid shares, or 88 percent excluding shares tendered through notices of guaranteed delivery.
The deal, originally announced in April, was expected to close in the second quarter, but following requests for additional information from the FTC, LabCorp has had to extend its cash tender offer 10 times, most recently last week.
The terms of the deal call for LabCorp to purchase 30.5 million shares of Orchid, including options at $2.80 per share. LabCorp said when the acquisition was announced that it would strengthen its presence and brand name in identity testing in the US while establishing a presence in identity testing in the UK.
"The proposed acquisition of Orchid Cellmark significantly diversifies and strengthens our specialized forensic and family relationship testing," David King, chairman and CEO of LabCorp, said in a statement in April.
In mid-afternoon trading, shares of LabCorp on the New York Stock Exchange were down 2 percent at $83.37.