Charles River Laboratories has agreed to sell its CDMO and Cell Solutions businesses to private‑equity firm GI Partners and to divest five European Discovery Services sites—Cambridge (UK), Freiburg (Germany), Kuopio (Finland), Portishead (UK) and Leiden (Netherlands)—to IQVIA Holdings. The transactions are expected to close in the second quarter of 2026 and will reduce the company’s 2026 revenue by slightly more than $200 million, trimming organic revenue‑growth guidance by over 50 basis points.
The divestitures are projected to lift non‑GAAP operating margin by at least 100 basis points in 2026 and add roughly $0.10 to non‑GAAP earnings per share for the partial year. In light of these gains, Charles River raised its fiscal‑2026 adjusted earnings guidance to $10.80–$11.30, a slight uptick from the consensus estimate of $10.88. The margin improvement stems from shedding lower‑margin, non‑core assets and shifting the revenue mix toward higher‑margin scientific services.
Management framed the sale as a key outcome of a comprehensive strategic review that began in late 2025. CEO James C. Foster said the divestitures “demonstrate continued progress on the actions outlined in our strategic review, refining our portfolio and enhancing shareholder value by focusing on higher‑margin core services.” The move also addresses recent headwinds in the CDMO business, including client terminations and weaker demand for cell‑ and gene‑therapy services.
Financially, the CDMO and Cell Solutions segment generated $143 million in 2025 revenue, while the European Discovery Services sites contributed $144 million. The GI Partners transaction is structured primarily around future, contingent performance‑based payments, whereas the IQVIA deal includes a $145 million cash component.
Market reaction to the announcement was mixed. Investors noted the upside from margin expansion and EPS accretion, but the revenue decline and lower organic growth guidance tempered enthusiasm. Analysts highlighted the company’s strategic pivot to higher‑margin services as a positive long‑term signal.
Overall, the divestitures signal Charles River’s shift toward a leaner, higher‑margin portfolio. While the company will see a short‑term revenue contraction, the expected margin gains and strengthened balance sheet position it for improved profitability and long‑term growth.
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