Barclays Maintains an 'Overweight' on Laboratory Corporation (LH); Orchid Cellmark (ORCH) Deal Wins FTC Approval

Barclays maintains an 'Overweight' on Laboratory Corporation of America (NYSE: LH) price target of $115.00.

Barclays analyst said, "LH announced that the Federal Trade Commission (FTC) approved its acquisition of Orchid Cellmark (Nasdaq: ORCH). In order to win approval, the FTC is requiring LabCorp to divest the U.S. paternity testing business of Orchid Cellmark that provides paternity testing for governments. Overall, we believe this will be a good deal for LabCorp although, this is a very small deal and it is unlikely to move the needle much. ORCH generated $63.7 million in revenue in 2010 with 37% in US and 63% in UK. We do not know what portion of Orchid Cellmark's U.S. based business was for government paternity testing; however, if we assume half of the U.S. business was for government-related paternity testing, then LabCorp is acquiring around $50 million in revenue with this transaction which will boost LabCorp's revenue growth by 0.9%."

For an analyst ratings summary and ratings history on Laboratory Corporation of America click here. For more ratings news on Laboratory Corporation of America click here.

Shares of Laboratory Corporation of America closed at $82.92 yesterday.

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