SAN FRANCISCO - Invitae (OTC:NVTAQ) Corporation (OTC:NVTA), a medical genetics company, announced that Labcorp (NYSE:LH) has won the bid to purchase substantially all of its assets for $239 million in cash. The acquisition is part of Invitae's sale process under Section 363 of the U.S. Bankruptcy Code and is pending court and regulatory approval.
The cash bid by Labcorp, a provider of comprehensive laboratory services, aims to ensure continuity for Invitae's customers, partners, and employees. "The agreement with Labcorp marks a significant step in our financial restructuring and supports our efforts to continue to deliver innovative and industry-leading products and services for healthcare," said Ken Knight, Invitae's president and CEO.
The sale, which also includes non-cash considerations, is subject to a court hearing scheduled for May 6, 2024. If the court and regulatory approvals are granted, Labcorp and Invitae expect the sale to be completed in the third quarter of 2024.
Invitae is currently operating as a debtor-in-possession and is advised by Kirkland & Ellis LLP, Moelis (NYSE:MC) & Company LLC, and FTI Consulting (NYSE:FCN), Inc. in this transaction. The sale is anticipated to play a crucial role in reducing Invitae's debt and allowing the company to meet its obligations, including employee benefits and wages, during the restructuring process.
Labcorp, with over 67,000 employees, operates in approximately 100 countries and provided support for 84% of the new drugs approved by the FDA in 2023. The company is recognized for its diagnostic and drug development capabilities.
InvestingPro Insights
As Invitae Corporation (OTC:NVTA) moves through its restructuring process, the latest financial metrics from InvestingPro paint a challenging picture. The company's revenue in the last twelve months as of Q3 2023 stood at $481.58 million, which reflects a decrease of 7.38% from the previous period. This contraction is mirrored in the quarterly figures, with a revenue decline of 9.21% in Q3 2023. Despite these headwinds, Invitae's gross profit margin remains at 27.13%, indicating some resilience in the company's core operations.
However, the strain on Invitae's financial health is evident in its operating income, which shows a significant adjusted loss of $485.58 million, leading to an operating income margin of -100.83%. This loss underscores the importance of the proposed acquisition by Labcorp (NYSE:LH) as a potential lifeline for Invitae's continuity.
InvestingPro Tips suggest that investors closely monitor the next earnings date on May 2, 2024, for further insights into Invitae's financial trajectory and the impact of the acquisition. Additionally, with the price of Invitae's stock currently at 12.38% of its 52-week high, investors may be weighing the risks and potential for recovery post-acquisition.
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