The spin-off has been structured to qualify as a tax-free distribution to Labcorp's stockholders and the company for U.S. federal income tax purposes
Labcorp Completes Spin-off of Fortrea. (Credit: Julia Koblitz on Unsplash)
Labcorp (NYSE: LH), a global leader of innovative and comprehensive laboratory services, today announced that it has completed the spin-off of Fortrea, the newly formed independent Contract Research Organization providing Phase I-IV clinical trial management, patient access and technology solutions to pharmaceutical and biotechnology organizations around the world. Fortrea will begin trading on the NASDAQ Stock Market under the symbol “FTRE” effective at the market opening today.
“I want to thank our teams for their tireless work in creating two strong, independent companies through the Fortrea spin,” said Adam Schechter, chairman and chief executive officer. “The transaction is intended to better meet customer needs, enable appropriate value-creating investments and unlock shareholder value. Moving forward, Labcorp is well positioned to deliver on our mission to improve health and improve lives.”
Upon closing, Fortrea made a cash distribution to Labcorp of approximately $1.6 billion as partial consideration for the assets that Labcorp contributed to Fortrea in connection with the spin-off. Labcorp intends to use these proceeds toward a $1.0 billion accelerated share repurchase program and paying down $300 million of debt maturing this year, with the remaining funds to be returned to shareholders through additional future share repurchases and/or cash dividends.
The spin-off distribution was completed at 11:59 p.m. on Friday, June 30, 2023, to stockholders of record as of the close of business on Tuesday, June 20, 2023. Each of Labcorp’s stockholders received one share of Fortrea common stock for every share of Labcorp common stock they held as of the record date.
No action or payment was required by Labcorp’s stockholders to receive shares of the newly formed Fortrea. Stockholders who held Labcorp’s common stock as of the record date will receive a book-entry account statement reflecting their ownership of the new Fortrea shares or have their brokerage account credited with the new Fortrea shares.
The spin-off has been structured to qualify as a tax-free distribution to Labcorp’s stockholders and the company for U.S. federal income tax purposes. The company’s stockholders are urged to consult with their tax advisors with respect to the U.S. federal, state, local and foreign tax consequences of the spin-off.
Goldman Sachs & Co. LLC, Barclays and Evercore are serving as Labcorp’s financial advisors, and Jones Day and Hogan Lovells are serving as legal counsel.
Source: Company Press Release