Charles River Labs to buy research firm for about $585 million

(Reuters) - Charles River Laboratories International Inc CRL.N said it would buy privately held WIL Research for about $585 million in cash to enhance its contract research business and expand in continental Europe.

Shares were up about 4 percent at $79.40 in early afternoon trading.

The purchase of the Ashland, Ohio-based firm will consolidate the industry enough to give Charles River a bit more pricing power in preclinical testing, Wells Fargo Securities analyst Tim Evans wrote in a note.

The preclinical testing industry has been plagued by increasing competition and anemic pricing despite growing demand.

Evans said the deal will offer Charles River a bigger foothold in agriculture and industrial chemical testing where the company has not been as aggressive to date.

The deal will add at least 20 cents per share to adjusted earnings in 2016, and 45 to 50 cents per share in 2017, Charles River said.

The deal is expected to add $150-$170 million to revenue in 2016 and $240-$250 million in 2017.

The transaction, funded with cash and credit facility, is expected to close early in the second quarter of 2016.

Reporting by Amrutha Penumudi and Anjali Rao Koppala in Bengaluru; Editing by Don Sebastian