Envigo Holdings Inc. Ratings Placed On CreditWatch Positive On Covance Transaction, Probable Deleveraging


  • Envigo Holdings Inc. and LabCorp's CRO business that operates under the name Covance announced a business swap transaction, in which Envigo receives LabCorp's research models business (and $485 million in cash) and LabCorp receives Envigo's nonclinical contract research services business.
  • We believe it is probable that Envigo will use proceeds to repay most if not all of its debt.
  • We are placing all of our ratings on Envigo, including the 'CCC+' long-term issuer credit rating on CreditWatch with positive implications.
NEW YORK (S&P Global Ratings) April 18, 2019--S&P Global Ratings today took the rating actions listed above. The CreditWatch placement follows the announcement that Envigo and LabCorp will exchange businesses; Envigo will receive LabCorp's research models business (and $485 million in cash) and LabCorp will receive Envigo's nonclinical contract research services business.
We expect to resolve the CreditWatch placement following the completion of the transaction. If Envigo repays all of its outstanding debt, we will likely withdraw the company's ratings.
If the transaction does not close, we will likely affirm the 'CCC+' rating on Envigo, and return the outlook to the negative, assuming operating performance and credit measures remain within our expectations.
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