Quest Diagnostics to Acquire AmeriPath for $2 Billion
27 April 2007
Lyndhurst, N.J. and Palm Beach Gardens, Fla., USA. Quest
Diagnostics Incorporated (NYSE:DGX) will take over AmeriPath, Inc in an all
cash transaction valued at approximately $2 billion, including approximately
$770 million in debt
Quest Diagnostics provides diagnostic testing,
information and services. AmeriPath, which is controlled by Welsh, Carson,
Anderson and Stowe IX, L.P., provides dermatopathology, anatomic pathology
and esoteric testing and has annualized revenues in excess of $800 million.
"This acquisition will establish our leading position in cancer diagnostics
with a focus on dermatopathology, anatomic pathology and molecular
diagnostics," said Surya N. Mohapatra, Ph.D., Chairman and Chief Executive
Officer, Quest Diagnostics. "AmeriPath is respected for its leadership in
dermatopathology and anatomic pathology, two of the fastest growing segments
in diagnostic testing. Additionally, its Specialty Laboratories will further
strengthen our hospital and esoteric testing business. The acquisition will
accelerate Quest Diagnostics' revenue and earnings growth and provide
compelling benefits for patients, physicians, hospitals and payers through
enhanced customer service and expanded test offerings."
operates three divisions. Dermpath Diagnostics has a team of over 80
board-certified dermatopathologists who interpret 2.4 million biopsies
annually. Its anatomic pathology division, which operates under the
AmeriPath brand, has expertise in gastroenterology, urology, oncology and
women's health. Specialty Laboratories, its esoteric testing business, is a
leading full-service clinical laboratory serving hospitals, reference
laboratories and physicians nationwide. AmeriPath has approximately 400
pathologists and clinical scientists and has nearly 4,000 employees.
"AmeriPath and Quest Diagnostics share a deep commitment to providing the
highest quality diagnostic services to physicians and their patients," said
Donald E. Steen, Chairman and Chief Executive Officer, AmeriPath. "The
joining together of our companies will facilitate and accelerate our mission
of becoming the leader in the innovative delivery of quality pathology
disease management services."
The transaction is expected to be completed
during the second quarter of 2007 and is subject to the satisfaction of
customary conditions, including regulatory clearance. The acquisition is
expected to have minimal impact to Quest Diagnostics' 2007 earnings per
share and be modestly accretive to 2008 earnings per share, before
anticipated charges related to the transaction.
Quest Diagnostics intends
to pay for the transaction, refinance AmeriPath's existing debt, and the
debt from the HemoCue acquisition completed earlier this year with the
proceeds of a new $1 billion one-year bridge loan and a new five-year $1.5
billion term loan, both committed to be underwritten by Morgan Stanley. The
bridge loan is expected to be refinanced shortly after the closing.