Covance decided to sell its centralized electrocardiogram (ECG) business to eResearchTechnology (eRT) for $35 million in cash.
Simultaneously, Covance also signed a marketing agreement to offer its clients cardiac safety services through eRT's centralized ECG platform over the next 10 years. Covance stands to receive up to $14 million more related to the transferred backlog and revenues generated from new contracts. Additionally, the firms expects to obtain certain referral fees over the term of the marketing agreement.
Covance reports that the ECG business accounted for less than 2% of its annual net revenues. The company’s other segments cover a range of offerings to the pharma, biotech, food and dietary supplements, environmental, and research industries. These include services related to antibodies, biomarkers, lab management, pharmacogenomics, and postmarketing surveillance.
“The transaction,” points out Joe Herring, chairman and CEO, “allows Covance's management team to focus more attention and investments on growing our service offerings in the larger markets we serve.”