Charles River to buy Frontage's bioanalysis business for $470 million

Charles River (CRL) agreed to buy the bioanalysis and DMPK operations of Frontage Holdings Corporation in Exton, Pennsylvania, for $470 million in cash, subject to closing adjustments, plus up to $75 million in earnout payments tied to future performance.

Shares rose 2.5% at 9:37 a.m. ET, from a $337.52 close.

The businesses provide bioanalysis, biomarker and DMPK testing for large and small molecules, mainly supporting clinical development programs. The acquisition includes a CLIA-certified central laboratory and two Exton sites covering about 150,000 square feet and employing about 340 people.

The three parties formed a consortium with Tigermed, Frontage's controlling shareholder, and its Chairman of the Board, Dr. Song Li, and set up an acquisition vehicle to take Frontage private through a court-sanctioned scheme of arrangement, withdrawing its listing on The Stock Exchange of Hong Kong.

Charles River will keep the bioanalysis and DMPK businesses through sole ownership of the acquisition vehicle and certain Frontage subsidiaries. Frontage's remaining businesses will go to Tigermed and Dr. Song Li, or his affiliates, through distribution of other subsidiaries.

Completion depends on resolutions at a Tigermed general meeting, regulatory approvals, Frontage shareholder approval and sanction by the Grand Court of the Cayman Islands. Tigermed, Dr. Song Li and certain trusts he controls have each undertaken to support the transaction. The company expects closing in the first half of 2027.

CEO Birgit Girshick said the acquisition "accelerates our strategy to expand our bioanalysis capabilities." Biologics and complex modalities account for about 75% of Charles River's bioanalysis revenue.

The company expects the bioanalysis sector to grow from about $6 billion in 2026 to $8 billion to $9 billion in 2031, or 6% to 8% a year. Clinical-phase testing makes up about 15% of Charles River's bioanalysis revenue.

In 2025, the majority of Frontage's bioanalysis revenue came from clinical development. The acquired businesses represented about 40% of Frontage's total 2025 revenue of $256.7 million.

The company expects revenue from the acquired businesses to grow at the projected sector rate over the next five years. It expects the deal to be neutral to non-GAAP earnings per share in 2027 and accretive thereafter.

Excluded items are expected to include mainly amortization of intangible assets, advisory fees, certain efficiency initiative costs and certain third-party integration costs.

The deal will be financed through Charles River's credit facility and available cash. The acquired businesses are expected to be reported in the DSA segment, which covers Discovery and Safety Assessment. It also expects synergies across the DSA and Manufacturing Solutions segments.