Charles River Laboratories To Acquire Frontage Holdings Corporation’s Bioanalysis And DMPK Operations In Pennsylvania For ~$470M In Cash Plus Additional Payments Of Up To $75M

The transaction is expected to close during the first half of 2027, subject to required shareholder and regulatory approvals, and other customary closing conditions. Frontage’s laboratory testing sites that will be acquired provide a comprehensive suite of bioanalysis, biomarker, and DMPK (drug metabolism and pharmacokinetics) testing services for large and small molecules, primarily supporting clinical development programs for biopharmaceutical clients. The planned acquisition includes a CLIA-certified central laboratory and encompasses two sites in Exton, Pennsylvania that operate across approximately 150,000 square feet and employ approximately 340 people.

Strategic Rationale

The planned acquisition of Frontage’s bioanalysis and DMPK businesses will expand Charles River’s capabilities in the high-growth clinical bioanalysis sector and enhance its ability to support clients from early-stage research through clinical development. The transaction complements Charles River’s existing strength in preclinical bioanalysis primarily for biologics and complex modalities, while adding scale and capacity to support future growth.

Accelerates Long-Term Bioanalysis Growth Strategy - Bioanalysis represents an attractive long-term growth opportunity as increasing demand across biologics, complex modalities, and advanced therapies requires additional scientific data and specialized assays. As a result, the bioanalysis market sector is expected to expand from approximately $6 billion in 2026 to approximately $8 to $9 billion in 2031, representing annual growth of 6% to 8%, with higher growth expected in biologics and complex modalities, as well as for clinical-phase testing. The planned acquisition complements Charles River’s ongoing investments in its bioanalysis capabilities, including capacity additions, positioning the Company to capitalize on attractive long-term growth opportunities.

 

Expands Clinical Bioanalysis Presence and Client Continuity – Clients increasingly seek continuity from laboratory testing partners as programs advance from preclinical to clinical development, as bioanalysis data generated from preclinical programs will help guide their early clinical decisions. Currently, approximately 15% of Charles River’s bioanalysis revenue is generated from clinical-phase testing. The planned acquisition will meaningfully expand the Company’s clinical bioanalysis capabilities and scale, enabling broader support across the drug development lifecycle including late-stage clinical diagnostic testing. In 2025, the majority of Frontage’s bioanalysis revenue was generated during clinical development. A more balanced and integrated bioanalysis portfolio is expected to strengthen Charles River’s client relationships, increase share of wallet, and improve client retention throughout longer-duration clinical programs.

 

Strengthens Scientific Leadership in High-Growth Modalities – Biologics and complex modalities represent the fastest-growing segments of the bioanalysis sector and account for approximately 75% of Charles River’s bioanalysis revenue. As these therapies become a larger share of development pipelines, demand for increasingly sophisticated bioanalysis solutions continues to grow. Frontage’s bioanalysis expertise will complement Charles River’s existing scientific capabilities, further enhancing its leading portfolio in advanced therapies while also expanding its small molecule bioanalysis capabilities. The acquisition is also expected to unlock additional synergies across the Discovery and Safety Assessment (DSA) and Manufacturing Solutions segments.
Financial Details

The bioanalysis and DMPK businesses that will be acquired represented approximately 40% of Frontage’s total 2025 revenue of $256.7 million. Charles River expects revenue of the acquired businesses will grow at the projected bioanalysis sector growth rate over the next five years.

The transaction is expected to be neutral to non-GAAP earnings per share in 2027 and accretive thereafter. Items excluded from non-GAAP earnings per share are expected to include all acquisition-related costs, primarily amortization of intangible assets, advisory fees, certain costs associated with acquisition-related efficiency initiatives, and certain third-party integration costs.

The acquisition and associated fees are expected to be financed through Charles River’s credit facility and available cash.

The acquired businesses are expected to be reported as part of Charles River’s DSA segment.

Transaction Details and Structure

Frontage Holdings Corporation is a publicly traded company on The Stock Exchange of Hong Kong. Charles River is participating in a consortium with Hongkong Tigermed Co., Limited (a subsidiary of Hangzhou Tigermed Consulting Co., Ltd.) and Dr. Song Li to first take Frontage private, after which Frontage will be restructured and Charles River will ultimately own the assets and liabilities related to its bioanalysis and DMPK businesses in Exton, Pennsylvania. Further details are as follows:

Charles River is acquiring Frontage together with Frontage’s controlling shareholder, Tigermed, and Frontage’s Chairman of the Board, Dr. Song Li. The three parties have formed a consortium and set up an acquisition vehicle that will privatize Frontage, which is listed on The Stock Exchange of Hong Kong Limited, by way of a court-sanctioned scheme of arrangement, following which Frontage’s listing will be withdrawn.

 

Immediately following completion of the privatization, the parties will separate Frontage’s businesses into separate subsidiaries. Charles River will retain the bioanalysis and DMPK businesses described above through sole ownership of the acquisition vehicle and certain Frontage subsidiaries, and Frontage’s remaining businesses will be transferred to Tigermed and Dr. Song Li (or his affiliates) through the distribution of other subsidiaries of Frontage.

 

Completion of the privatization is subject to a number of approvals and conditions, including passing of the requisite resolutions at the general meeting of Tigermed, regulatory approvals, approval by Frontage shareholders and sanction of the scheme by the Grand Court of the Cayman Islands. Tigermed, Dr. Song Li and certain trusts controlled by him have each undertaken to support the transaction. Further details will be set out in the scheme document that will be sent to Frontage shareholders.