Anna Kozinski

Anna Kozinski asked about the reacceleration of the hospital M&A pipeline, whether deal criteria have changed, and if Labcorp is willing to acquire lower-margin assets for significant share gains in specific geographies.

Answer

Chairman and CEO Adam Schechter confirmed a strong hospital pipeline. He explained that while running inpatient labs typically has the lowest margin, it offers a high return on cost of capital. When combined with reference work and outreach business acquisitions, the overall deal margin tends to be similar to Labcorp's average, making these comprehensive partnerships attractive.

Anna Kozinski (on behalf of Luke Surgot) from Berkeley asked about the reacceleration of the hospital M&A pipeline, specifically if Labcorp's deal criteria have changed and if they would consider lower-margin assets for significant geographic share gains.

Answer

Chairman and CEO Adam Schechter confirmed a strong hospital pipeline and explained that Labcorp evaluates three components: running inpatient labs (lower margin, high return on capital), reference work (average margin), and acquiring outreach businesses (average margin). He stated that typically, combining all three results in overall margins neutral to the company average over time.