BUSINESS ACQUISITIONS

12 Months Ended

Dec. 31, 2021

BUSINESS ACQUISITIONS AND DISPOSITIONS

2021

During the year ended December 31, 2021, the Company acquired various businesses and related assets for approximately $496.9 in cash (net of cash acquired). The purchase consideration for all acquisitions year to date has been allocated to the estimated fair market value of the net assets acquired, including approximately $198.5 in identifiable intangible assets and a residual amount of non-tax-deductible goodwill of approximately $298.4. The amortization periods for intangible assets acquired from these transactions range from 11 to 15 years for customer relationships, 5 to 10 years for patents and technology, 5 years for non-compete agreements, and 5 years for trade names. These acquisitions were made primarily to extend the Company's geographic reach in important market areas and enhance the Company's scientific differentiation. 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. A summary of the net assets acquired in 2021 for these businesses is included below:


	Amounts Acquired During Year Ended December 31, 2021

Accounts receivable	$	10.8
Unbilled services	3.2
Inventories	1.6
Prepaid expenses and other	3.0
Property, plant and equipment	56.6

Goodwill	298.4
Intangible assets	198.5

Total assets acquired	572.1
Accounts payable	2.5
Accrued expenses and other	3.9
Unearned revenue	6.6

Other liabilities	62.2
Total liabilities acquired	75.2
Net assets acquired	$	496.9

The purchase price allocation for several transactions are still preliminary and subject to change. The areas of the purchase price allocation that are not yet finalized relate primarily to intangible assets, 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. Any adjustments will be recorded in the period in which they are identified.

Unaudited Pro Forma Information for 2021 Acquisitions

Had the aggregate of the Company's 2021 acquisitions been completed as of January 1, 2020, the Company's pro forma results would have been as follows:


	Years Ended December 31,
	2021		2020
Revenues	$	16,216.6	$	14,112.8
Net earnings attributable to Laboratory Corporation of America Holdings	2,378.3		1,554.5

2020

During the year ended December 31, 2020, the Company acquired various businesses and related assets for approximately $267.6 in cash (net of cash acquired). The purchase consideration for all acquisitions year to date has been allocated to the estimated fair market value of the net assets acquired, including approximately $121.3 in identifiable intangible assets and a residual amount of non-tax-deductible goodwill of approximately $166.2. The amortization periods for intangible assets acquired from these businesses range from 12 to 15 years for customer relationships. These acquisitions were made primarily to extend the Company's geographic reach in important market areas and enhance the Company's scientific differentiation. 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. A summary of the net assets acquired in 2020 for these businesses is included below:


	Amounts Acquired During Year Ended December 31, 2020

Accounts receivable	$	4.9
Unbilled services	2.4


Property, plant and equipment	1.3

Goodwill	166.2
Intangible assets	121.3

Total assets acquired	296.1
Accounts payable	0.9
Accrued expenses and other	22.4
Unearned revenue	1.1

Other liabilities	4.1
Total liabilities acquired	28.5
Net assets acquired	$	267.6

Unaudited Pro Forma Information for 2020 Acquisitions

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


	Years Ended December 31,
	2020		2019
Revenues	$	14,032.7	$	11,717.5
Net earnings attributable to Laboratory Corporation of America Holdings	1,564.6		837.6

2019

On June 3, 2019, the Company's DD segment acquired Envigo's nonclinical contract research services business, expanding DD's global nonclinical drug development capabilities with additional locations and resources. Additionally, the Company divested the CRP business, which was a part of the DD segment, to Envigo. As part of this sale, DD 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 the new term loan facility entered into in 2019 concurrently with the transaction.







	Purchase Price Allocation for Envigo
Net Assets Acquired
Cash and cash equivalents	$	11.3
Accounts receivable	12.1
Unbilled services	25.6
Inventories	4.5
Prepaid expenses and other	10.8
Property, plant and equipment	128.4
Deferred income taxes	25.2
Goodwill	376.6
Customer relationships	140.8
Trade name and trademarks	0.6
Other assets	9.9
Total assets acquired	745.8
Accounts payable	15.2
Accrued expenses and other	10.4
Unearned revenue	49.9


Other liabilities	69.3
Total liabilities acquired	144.8
Net Envigo assets acquired	$	601.0
Floating rate secured note receivable due 2022	$	110.0
Total	$	711.0

The 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.

The Envigo transaction contributed $124.2 and $17.9 of revenues and operating income, respectively, during the year ended December 31, 2020. The divested CRP business contributed operating income of $5.5 and $13.2 for the years ended December 31, 2019 and 2018, respectively.

During the year ended December 31, 2019, in addition to the Envigo transaction, the Company acquired various businesses and related assets for approximately $286.4 in cash (net of cash acquired). The purchase consideration for all acquisitions has been allocated to the estimated fair market value of the net assets acquired, including approximately $184.3 in identifiable intangible assets and a residual amount of non-tax-deductible goodwill of approximately $115.1. 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. 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.