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."

AmeriPath, Inc. 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.

To top

To top