Deutsche Bank Comments on LabCorp's Deal with Orchid Cellmark

Deutsche Bank has published a research report on LabCorp of America LH commenting on the company's deal completion with Orchid Cellmark expected in April 2012. In the report, Deutsche Bank writes, "After an extended review, the US Federal Trade Commission has approved the acquisition, with the stipulation that LH divest Orchid Cellmark's US government paternity business. This was largely expected given LH and Orchid Cellmark's number 1 and 2 positions in this business segment. The divesture of this business line has already been contemplated in our model. We estimate that the US government paternity business represented roughly $15 million in revenues and the deal will add roughly $50M in annual revenues to LH after the divestiture. We maintain a favorable view on this transaction and see the Orchid Cellmark's UK testing business as a potential upside risk in 2012-2013." Deutsche Bank maintains its Buy rating and $94 price target on LabCorp, which is currently trading up $0.72 from yesterday's $82.92 closing price.