Overview
Charles River Laboratories International announced plans to sell two business groups and a set of European discovery assets, moves that lifted its shares 3.5% in premarket trading on Wednesday. The company has executed a definitive agreement to divest its CDMO and Cell Solutions units to GI Partners and reached an agreement to sell specific European Discovery Services assets to IQVIA Holdings for cash consideration.
Details of the transactions
Under the terms disclosed, the sale of the CDMO and Cell Solutions businesses to GI Partners is structured primarily around future contingent performance-based payments. The CDMO segment supports manufacturing and services for gene-modified cell therapies and gene therapies, including work with viral vectors and plasmid DNA. The Cell Solutions unit supplies human-derived cellular materials used in cell therapy development. Together these two businesses produced $143 million in annual revenue in 2025.
Separately, the company agreed to divest certain European Discovery Services assets to IQVIA Holdings in a cash transaction valued at approximately $145 million, with the potential for up to an additional $10 million in payments. Those European assets generated $144 million in annual revenue in 2025 and encompass five sites that provide in vitro drug discovery and pharmacology services across oncology, neuroscience, immunology and advanced cell biology.
Timing and conditions
Both divestitures are expected to close in the second quarter of 2026, subject to customary closing conditions.
Financial impact and guidance changes
Charles River said the planned divestitures will reduce reported revenue by slightly more than $200 million in 2026 and will subtract in excess of 50 basis points from organic revenue growth guidance. At the same time, the company projects the transactions will deliver at least 100 basis points of incremental non-GAAP operating margin improvement for 2026 and will contribute about $0.10 to non-GAAP earnings per share for the partial year.
Reflecting the expected impact of the sales, Charles River revised its full-year 2026 guidance. The company now anticipates reported revenue to decline in a range of 5.0% to 3.5%, compared with prior guidance that called for at least flat to 1.5% growth. On an organic basis, revenue is now expected to decline between 1.5% and 0.5%, versus earlier guidance of down 1.0% to at least flat.
Despite the lower revenue outlook, the company raised its non-GAAP earnings per share guidance to $10.80 to $11.30, up from the prior $10.70 to $11.20 range.
What this means
The divestitures reshape Charles River’s portfolio by removing certain manufacturing and human-derived material supply activities and by transferring a set of European discovery capabilities to IQVIA. The moves are expected to lower reported top-line metrics in 2026 while improving non-GAAP operating leverage and near-term EPS on a partial-year basis. Both transactions remain subject to customary closing conditions and expected to close in the second quarter of 2026.
Summary takeaway
Investors reacted positively to the portfolio sales, which trade off near-term revenue for margin expansion and modest EPS accretion. The deals affect segments tied to cell and gene therapy manufacturing, human-derived materials for cell therapy development, and in vitro drug discovery services across several therapeutic areas.