Massachusetts-based CRO Charles River Laboratories (CRL) has agreed to acquire the CRO services division of Galapagos, which includes both Argenta and BioFocus, for approximately $179 million.

The businesses offer integrated drug discovery services, with a predominant focus on in vitro capabilities. CRL said the acquisition will position it as a full service, early-stage CRO, with integrated in vitro and in vivo capabilities from target discovery through preclinical development.

The transaction includes future performance payments of up to $7 million.

James C. Foster, chairman, president, and CEO of Charles River, said, “The acquisition of Argenta and BioFocus is precisely in line with our strategy to build a broader portfolio of essential products and services to support the drug discovery and development continuum, and the increasing virtualization of the biopharmaceutical industry. Argenta and BioFocus’ upstream in vitro capabilities will be an excellent fit with our in vivo expertise, and will enable us to engage with our clients earlier in the drug discovery process. This enhances the value we can provide to our clients because it allows them to outsource integrated drug discovery and early-stage development programs to a single provider. This acquisition advances Charles River’s position as a market leader in the fast-growing outsourced discovery services market.”

Galapagos previously announced it had put its drug discovery services arm up for sale to provide funding for the clinical development of its internal pipeline. “The hybrid business model has come to a natural end,” said Onno von de Stolpe, Galapagos CEO. “Galapagos now is considering divesting the services division because the pipeline has matured to a level that we should focus on it.”

The services division also includes Fidelta in Croatia, which is not part of the sale to Charles River.

Located in the U.K. and the Netherlands, Argenta and BioFocus, with more than 340 scientists, provide a suite of drug discovery services from target discovery through the delivery of clinic-ready candidates to a broad range of pharmaceutical and biotechnology companies. Their in vitroexpertise includes medicinal chemistry, target discovery and complex in vitro biology, as well as therapeutic area expertise in respiratory, inflammation, oncology and CNS diseases. Biofocus was founded in 1997 and employs 150 scientists delivering preclinical drug candidates in all therapeutic areas. Argenta, founded in 2000, has 160 staff.

David Smith, currently CEO of Galapagos Services, will continue to lead Argenta and BioFocus as corporate vice president, In Vitro Discovery Services.

In 2013, Argenta and BioFocus generated combined sales of $87 million. The sales growth rate for the combined Argenta and BioFocus businesses is expected to be approximately 10% in 2014. The purchase price implies a multiple of approximately 2x 2013 sales and approximately 12x 2013 adjusted EBITDA. The transaction is expected to close early in the second quarter of 2014, and is expected to add approximately 6% to Charles River’s net sales in 2014.