Labcorp, the laboratory service supplier based in the US, has completed the spin-off of Fortrea, to create the newly formed contract research organisation that will give pharmaceutical and biotechnology organisations access to global Phase I-IV clinical trial management, patient access and technology solutions.

Fortrea made a cash distribution of around $1.6bn as partial consideration for the assets that Labcorp contributed to Fortrea in connection with the spin-off.

Labcorp will use the distribution toward a $1bn accelerated share repurchase program and pay down $300m of debt maturing this year. Whatever is left of the funds will be distributed among shareholders.

The spin-off distribution was completed on 30 June 2023 to stockholders of record as of the close of business on 20 June 2023.

Labcorp’s stockholders each received one share of Fortrea common stock for every share of Labcorp common stock they held as of the record date.

The spin-off will pass as a tax-free distribution to Labcorp’s stockholders and the company for US federal income tax purposes.

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Labcorp’s financial advisors are Goldman Sachs & Co. LLC, Barclays and Evercore. Jones Day and Hogan Lovells will serve as legal counsel.

Fortrea will trade on the NASDAQ Stock Market under the symbol “FTRE”.

“I want to thank our teams for their tireless work in creating two strong, independent companies through the Fortrea spin,” said Adam Schechter, CEO of Labcorp.

“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.”

In May 2023 Labcorp partnered with Forge Biologics and in April 2021, it partnered with Xcell. Both ventures aimed to develop gene therapy development.