Consolidation in the clinical labs space is boosting top and bottom lines of large companies in the space, with large companies such as Laboratory Corporation of America Holdings (LH) acquiring small and midcap labs, says Thomas Gallucci, Managing Director and Senior Analyst with Lazard Capital Markets.
LabCorp has outperformed the market year to date, Gallucci says. “Those acquisitions have helped the company to overcome some of the more sluggish underlying organic trends.”
That makes LabCorp “well positioned going forward,” Gallucci says, who points to the earnings benefits of the company’s recent acquisitions of Genzyme Genetics and Westcliff Medical Labs.
“The Genzyme deal is being integrated this year and is dilutive, but should be accretive next year. And they should have an inflection point in the earnings growth between 2011 and 2012 versus 2010 and 2011. Westcliff should be more additive in 2012 than it is in 2011,” Gallucci said.
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