Invitae (OTC:) Corp (NYSE: NVTA), a medical laboratory services provider, has concluded the sale of certain assets to Labcorp Genetics Inc., an affiliate of Laboratory Corporation of America (NYSE:) Holdings.
The transaction, which closed on Monday, involved a cash purchase price of $239 million alongside additional non-cash considerations.
The sale was authorized by the United States Bankruptcy Court for the District of New Jersey following Invitae’s voluntary Chapter 11 filing on February 13, 2024. The auction process led to Labcorp’s selection as the successful bidder, with the court approving the asset purchase agreement on May 1, 2024.
On August 2, 2024, the Bankruptcy Court confirmed Invitae’s Third Amended Joint Plan, which included the distribution of proceeds from the sale and the winding down of the remaining Company Parties’ estates.
As per the plan that became effective on Wednesday, all existing equity interests of Invitae, including common stock, were cancelled without any consideration, rendering them valueless.
The confirmed plan also dissolved Invitae’s board of directors and dismissed its officers, including CEO Kenneth D. Knight and CFO Ana J. Schrank.
The company’s liabilities totaled approximately $1,692 million against assets of about $394 million, as reported in its most recent monthly operating report for the period ended June 30, 2024.
This development marks a significant shift in Invitae’s business trajectory, as it transitions its assets to Labcorp and concludes its bankruptcy process.
InvestingPro Insights
As Invitae Corp (NYSE:NVTA) navigates through its Chapter 11 bankruptcy proceedings, recent financial data from InvestingPro sheds light on the company’s performance leading up to the asset sale. Invitae’s revenue in the last twelve months as of Q3 2023 stood at $481.58 million, indicating a challenging period with a revenue decline of 7.38% compared to the same period the previous year. This downward trend is further reflected in the quarterly revenue growth, which contracted by 9.21% in Q3 2023.
Despite this, the company maintained a gross profit margin of 27.13%, with a gross profit of $130.64 million during the same timeframe. However, the operational challenges are apparent, as Invitae reported a substantial adjusted operating loss of $485.58 million and a similar EBIT loss, highlighting the financial difficulties that have led to the restructuring.
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