LabCorp has a market valuation of about $12 billion.

(Bloomberg) — Laboratory Corp. of America Holdings (NYSE:HCA) has held talks with INC Research Holdings Inc. (Nasdaq:INCR) about a possible deal, according to people with knowledge of the matter, as it seeks to solidify its position as the biggest diagnostics company in the U.S.

Talks are preliminary, and the companies may choose not to proceed with a transaction, said the people, asking not to be identified as the discussions are private.

INC Research rose less than 1 percent to $49.68 at the close Monday in New York, valuing the company at about $2.7 billion. The shares climbed as much as 16 percent in intraday trading. LabCorp, as the company is known, has a market valuation of about $12 billion.

A representative for Burlington, North Carolina-based LabCorp declined to comment. An official for INC Research couldn’t be reached for comment.

Lab operators such as LabCorp and Quest Diagnostics Inc. have been looking for new sources of revenue as they contend with lower reimbursement from insurers and Medicare. The recent movement by hospital companies to buy up physician-owned medical practices has also siphoned off some of the lab work that the major providers had traditionally done.

In 2014, LabCorp agreed to buy Covance Inc. for about $6.1 billion, as part of a plan to move beyond traditional blood draws as the diagnostics industry delves into more complicated tests for genetic diseases.

See also: 

Centene completes Health Net acquisition

Inovalon agrees to acquire Avalere

   

Are you following us on Facebook?

Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.