Charles River/Inveresk
Charles River Laboratories, the world's leading supplier of laboratory animals for medical testing and a growing player in the pharmaceutical lab testing industry bought out Inveresk Research Group, another major US-based drug-testing company. The deal was for $1.5 billion. WHILE Inveresk is headquartered in North Carolina, its roots are in Scotland and it has a major European presence, something Charles River was interested in.
This a major vertical move. Inveresk is already on of Charles River's major clients for purebred laboratory rat, mice, and other animals for testing. Drug testing is a growing industry, but consolidation among big pharmaceutical companies is causing a consolidation among those companies that serve them. The merger pushes Charles River's testing capability from Phase I (pre-clinical) to Phases II to IV (clinical test on human subjects). It also gives Charles River major holdings in computer-based testing and analysis, something Inveresk is strong in.
A Reuters report (7/1/2004) noted that "the company's move could herald more mergers in the field." That's especially true since some of the key players, such as Life Sciences and MDS, have lots of cash, and many of the existing companies are relatively small.
Charles River went public in 2000, while Inveresk went public in 2002. Charles River had revenue of $617 in 2003, while Inveresk's income was $272,
Charles River extended from animal breeding to testing as a result of a series of mergers and acquisitions. Among those in the last few years:
2001 Pathology Associates International Toxicological pathology
2001 Primedica Pre-clinical drug testing
2001 Generic Models Specialty laboratory animal breeding
2002 DakDak Photoaging Technologies In-vitro carcinogen screening
2002 Biological Laboratories Europe Pre-clinical drug and device testing
2002 Springhorn Laboratories Pre-clinical drug testing
2004 River Valley Farms Testing of cardiological devices
Inveresk also has made several recent acquisitions:
2001 ClinTrial Research Designs and manages clinical trials
2002 PharmaResearch Corporation Designs and manages clinical trials
There was the usual complaining in the press about Charles River;s overpaying, and in the short run that's probably true. But the comapny's longer term prosperity, even its existence, depends on being a dominating force in a tightenming market.
3:32:17 PM 
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