Life sciences company Labcorp (LH) announced Thursday actions that its Board of Directors and management team have taken to enhance shareholder returns. These actions follow the conclusion of Labcorp's thorough review of its structure and capital allocation strategy, as announced in March 2021.
The company is initiating a dividend in the second quarter of 2022, with the Board is targeting a dividend payout ratio of between 15 to 20% of adjusted earnings. It also authorized a $2.5 billion share repurchase program, with $1 billion to be repurchased under an accelerated share repurchase plan.
Further, the company is implementing a new LaunchPad business process improvement initiative, targeting savings of $350 million over the next three years. It is also continuing a commitment to profitable growth through investments in science, innovation and new technologies.
As part of the comprehensive review, extensive discussions were held with third parties and the Board considered a wide range of options, including significant acquisitions, divestitures, spinning off businesses, as well as spinning and merging those businesses with strategic partners.
The Board unanimously concluded that the Company's existing structure is in the best interest of all stakeholders at this time.
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