BUSINESS ACQUISITIONS

6 Months Ended

Jun. 30, 2020

Business Combination Disclosure [Text Block]

BUSINESS ACQUISITIONS AND DISPOSITIONS On June 3, 2019, CDD acquired Envigo's nonclinical contract research services business, expanding CDD's global nonclinical drug development capabilities with additional locations and resources. Additionally, the Company divested the Covance Research Products (CRP) business, which was a part of CDD, to Envigo. As part of this sale, CDD entered into a multi-year, renewable supply agreement with Envigo. The Company paid cash consideration of $601.0, received a floating rate

secured note of $110.0, and recorded a loss on the sale of CRP of $12.2. The Company funded the transaction through a new term loan facility.

The final valuation of acquired assets and assumed liabilities in the transaction as of June 3, 2019, include the following:


Consideration Transferred
Cash consideration	$	601.0
Fair value of CRP	110.0
Total	$	711.0

	Preliminary June 30, 2019		Measurement Period Adjustments		Final June 30, 2020
Net Assets Acquired
Cash and cash equivalents	$	15.1	$	(3.8)	$	11.3
Accounts receivable	16.5		(4.4)		12.1
Unbilled services	26.5		(0.9)		25.6
Inventories	4.5		—		4.5
Prepaid expenses and other	3.5		7.3		10.8
Property, plant and equipment (including ROU operating lease assets)	99.1		29.3		128.4
Deferred income taxes	25.5		(0.3)		25.2
Goodwill	432.2		(55.6)		376.6
Customer relationships	125.8		15.0		140.8
Trade name and trademarks	0.6		—		0.6
Other assets	9.9		—		9.9
Total assets acquired	759.2		(13.4)		745.8
Accounts payable	15.4		(0.2)		15.2
Accrued expenses and other	11.6		(1.2)		10.4
Unearned revenue	49.9		—		49.9

Operating lease liabilities	15.0		(15.0)		—
Other liabilities	66.3		3		69.3
Total liabilities acquired	158.2		(13.4)		144.8
Net Envigo assets acquired	601.0		$	—	$	601.0
Floating rate secured note receivable due 2022	110.0
Total	$	711.0

The final purchase consideration for Envigo has been allocated to the estimated fair market value of the net assets acquired, including approximately $141.4 in identifiable intangible assets and a residual amount of non-tax-deductible goodwill of approximately $376.6. The amortization period for intangible assets acquired is 11 years for customer relationships.

During the six months ended June 30, 2020, the Company recorded a $5.0 charge for the estimated credit loss related to the CDD floating rate secured note receivable due 2022 from Envigo.

During the six months ended June 30, 2020, the Company acquired a business and related assets for approximately $17.3 in cash (including contingent consideration of $6.0 and net of cash acquired). The purchase consideration for this acquisition has been allocated to the estimated fair market value of the net assets acquired, including approximately $9.2 in identifiable intangible assets and a residual amount of non-tax deductible goodwill of approximately $8.1. This acquisition was made primarily to expand its specialty testing.

During the six months ended June 30, 2019, the Company acquired various businesses and related assets for approximately $117.7 in cash (net of cash acquired). The purchase consideration for all acquisitions in the six months ended June 30, 2019, has been allocated to the estimated fair market value of the net assets acquired, including approximately $90.7 in identifiable intangible assets and a residual amount of non-tax deductible goodwill for approximately $53.8. The amortization periods for intangible assets acquired from these businesses range from 11 to 15 years for customer relationships. These acquisitions were made primarily to extend the Company's geographic reach in important market areas, enhance the Company's scientific differentiation and to expand the breadth and scope of the Company's CRO services. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired was recorded as goodwill. The goodwill reflects the Company's expectations to utilize the acquired businesses' workforce and established relationships and the benefits of being able to leverage operational efficiencies with favorable growth opportunities in these markets.

Unaudited Pro Forma Information

Had the Company's total 2019 and 2020 acquisitions been completed as of January 1, 2019, the Company's pro forma results would have been as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Revenues	$	2,770.7	$	2,941.0	$	5,596.7	$	5,775.9
Net earnings attributable to Laboratory Corporation of America Holdings	$	231.8	$	194.3	$	(84.9)	$	382.6