BUSINESS ACQUISITIONS

3 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

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 preliminary 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			Preliminary March 31, 2020
Net Assets Acquired
Cash and cash equivalents	$	15.1	$	(3.7	)	$	11.4
Accounts receivable	16.5		(4.6		)	11.9
Unbilled services	26.5		(0.3		)	26.2
Inventories	4.5		—			4.5
Prepaid expenses and other	3.5		6.3			9.8
Property, plant and equipment (including ROU operating lease assets)	99.1		25.8			124.9
Deferred income taxes	25.5		(11.5		)	14.0
Goodwill	432.2		(51.4		)	380.8
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		(24.4		)	734.8
Accounts payable	15.4		(0.2		)	15.2
Accrued expenses and other	11.6		(1.5		)	10.1
Unearned revenue	49.9		—			49.9
Operating lease liabilities	15.0		(15.0		)	—
Other liabilities	66.3		(7.7		)	58.6
Total liabilities acquired	158.2		(24.4		)	133.8
Net Envigo assets acquired	601.0		$	—		$	601.0
Floating rate secured note receivable due 2022	110.0
Total	$	711.0

The preliminary 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 $380.8. The amortization period for intangible assets acquired is 11 years for customer relationships.

The purchase price allocation for the Envigo transaction is still preliminary and subject to change. The areas of the purchase price allocation that are not yet finalized relate primarily to goodwill and the impact of finalizing deferred taxes. Accordingly, adjustments may be made as additional information is obtained about the facts and circumstances that existed as of the valuation date. The Company expects these purchase price allocations to be finalized by the second quarter of 2020. Any adjustments will be recorded in the period in which they are identified.

During the three months ended March 31, 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 three months ended March 31, 2019, the Company acquired various businesses and related assets for approximately $47.3 in cash (net of cash acquired). The purchase consideration for all acquisitions in that period has been allocated to the estimated fair market value of the net assets acquired, including approximately $24.8 in identifiable intangible assets and a residual amount of goodwill of approximately $22.1. 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.

Unaudited Pro Forma Information

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

	Three Months Ended March 31, 2019
Revenues	$	2,832.6
Net earnings attributable to Laboratory Corporation of America Holdings	$	188.0