Labcorp Holdings Inc. announced that it has closed a $194 million cash purchase of select ambulatory outreach laboratory assets from Community Health Systems (CHS). The deal, completed on December 2, 2025, adds patient service centers and in‑office phlebotomy locations in 13 states to Labcorp’s network, while CHS continues to operate its inpatient and emergency department laboratories.
The acquisition broadens Labcorp’s community‑based testing reach, a core element of its dual‑segment strategy. By adding high‑volume, community‑based sites, Labcorp strengthens its Diagnostics segment, which accounted for $2.8 billion of revenue in Q3 2025—an 8.5% year‑over‑year increase. The move also supports the company’s goal of margin expansion, as the new sites are expected to deliver operational leverage and higher‑margin service mix.
Labcorp’s Q3 2025 results provide context for the transaction. Revenue rose 8.6% to $3.56 billion, driven by organic demand and a 1.7% contribution from acquisitions. Adjusted earnings per share reached $4.18, beating consensus estimates by $0.04 (about 1%) thanks to disciplined cost control and a favorable mix shift toward higher‑margin diagnostics. Operating margin expanded to 11.1% from 7.7% in Q3 2024, reflecting both pricing power and scale advantages. Management raised full‑year revenue guidance to 7.4%–8% growth and adjusted EPS guidance to $16.16–$16.50, up from prior forecasts, signaling confidence in sustained demand.
In its earnings call, Chairman and CEO Adam Schechter highlighted the momentum in Labcorp’s Diagnostics and Central Laboratory businesses, noting strong cash flow and a focus on delivering value to customers and shareholders. Mark Schroeder, President of Labcorp Diagnostics, emphasized that the acquisition expands access to high‑quality laboratory services for CHS‑affiliated health systems, underscoring the company’s commitment to improving community health outcomes.
Market reaction to the announcement was mixed. While some analysts noted that revenue met expectations and EPS slightly beat estimates, others pointed to a revenue shortfall relative to certain forecasts, tempering enthusiasm. The mixed response reflects concerns about margin compression in other segments and the broader competitive landscape, but the acquisition is viewed as a strategic win that positions Labcorp to capture a larger share of the outpatient testing market.
The deal aligns with an industry trend in which health systems divest outreach laboratory services to larger diagnostic firms, allowing CHS to focus on core hospital operations. For Labcorp, the expansion of its community footprint strengthens its competitive position against rivals such as Quest Diagnostics and supports long‑term growth in a market that increasingly values convenient, high‑quality testing services.
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