TETERBORO, N.J., Feb 26, 2003 /PRNewswire-FirstCall via COMTEX/ -- Quest
Diagnostics Incorporated (NYSE: DGX), the nation's leading provider of
diagnostic testing, information and services, announced today it has acquired
Unilab Corporation (Nasdaq: ULAB) by accepting for payment all shares of Unilab
common stock that were tendered pursuant to the previously announced cash
election exchange offer. As of 12:00 midnight, New York City time, on February
25, 2003, more than 36 million shares of Unilab Corporation common stock had
been tendered and accepted for payment, including approximately 2.6 million
shares purchased on the exercise of Unilab options, representing more than 99%
of the outstanding Unilab Corporation common stock.
"This transaction positions Quest Diagnostics for profitable growth in
California and enhances service for healthcare customers throughout the state,"
said Kenneth W. Freeman, Chairman and Chief Executive Officer of Quest
Diagnostics. "As we join our companies together, the number one priority is to
maintain or enhance service quality and value for our customers."
Quest Diagnostics expects the transaction to improve customers' access to
diagnostic testing services through the largest network of conveniently located
patient service centers in the state. In addition, the combination will provide
customers with state-of-the-art electronic connectivity services, innovative
technologies and an expanded esoteric testing menu from Quest Diagnostics'
Nichols Institute, based in San Juan Capistrano, Calif. Physician and hospital
customers will also have available to them direct physician-to-physician
consultations with the company's extensive network of medical and scientific
specialists.
Quest Diagnostics has acquired all of Unilab's operations, including three
full-service laboratories, 35 rapid-response laboratories, and 367 patient
service centers. Unilab reported revenues of $420 million for the four quarters
ended September 30, 2002, and has about 4,000 employees.
Pursuant to the transaction, Quest Diagnostics will issue approximately 7.4
million shares of its common stock (including approximately 300,000 shares
reserved for the exercise of outstanding Unilab options) and pay approximately
$297 million in cash for Unilab shares. In addition, Quest Diagnostics will
repay approximately $100 million of Unilab's outstanding bank debt and has
launched a cash tender offer for the outstanding $100.8 million principal amount
of Unilab Corporation 12-3/4% Senior Subordinated Notes due 2009. This cash
tender has a consent date of February 26, 2003 and expires on March 6, 2003.
The cash and stock due to tendering stockholders will be distributed promptly
after certificates are delivered to the Exchange Agent (or book entry transfers
are completed) for all of the shares tendered pursuant to notices of guaranteed
delivery, which is required to be completed by 5:00 p.m. on February 28, 2003.
The cash election feature of the exchange offer has been over-subscribed. As a
result, promptly following the close of business on February 28, 2003, Quest
Diagnostics will announce the amount of cash and the fraction of a share of
Quest Diagnostics common stock that will be exchanged for each Unilab share that
has been tendered for cash. Unilab shareholders who elected to receive Quest
Diagnostics common stock will receive 0.3424 of a share of Quest Diagnostics
common stock for each of their Unilab shares.
Under the terms of the exchange offer, Unilab will merge into a wholly-owned
subsidiary of Quest Diagnostics on February 28, 2003. In the merger, each
remaining outstanding share of Unilab common stock will be converted into 0.3424
of a share of Quest Diagnostics common stock.
As part of an agreement with the Federal Trade Commission, Quest Diagnostics
also has agreed to divest certain assets in Northern California following the
completion of the transaction to Laboratory Corporation of America (LabCorp(R))
(NYSE: LH) for $4.5 million in cash. The assets to be sold to LabCorp include
the assignment of four capitated contracts with independent physician
associations (IPAs), as well as the leases for 46 patient service centers, five
of which also serve as rapid response laboratories, located throughout Northern
California. Approximately $27 million in annual revenues are generated by
capitated fees under the IPA contracts and associated fee-for-service testing
for physicians whose patients use these patient service centers, as well as from
specimens received directly from the IPA physicians. The assets will transition
to LabCorp over a period of approximately six months.
For additional information on the cash election exchange offer, Unilab
shareholders may contact Georgeson Shareholder Communications at 212-440-9800.
In addition, Merrill Lynch is the Dealer Manager for the exchange offer and may
be contacted toll free at 866-276-1462.
About Quest Diagnostics
Quest Diagnostics Incorporated is the nation's leading provider of diagnostic
testing, information and services, providing insights that enable physicians,
hospitals, managed care organizations and other healthcare professionals to make
decisions to improve health. The company offers the broadest access to
diagnostic laboratory services through its national network of laboratories and
patient service centers. Quest Diagnostics is the leading provider of esoteric
testing, including gene-based medical testing, and empowers healthcare
organizations and clinicians with state-of-the-art connectivity solutions that
improve practice management. Additional company information can be found on the
Internet at: http://www.questdiagnostics.com .
FORWARD-LOOKING STATEMENTS:
This communication contains certain forward-looking statements. These
forward-looking statements, which may include, but are not limited to,
statements concerning the financial condition, results of operations and
businesses of Quest Diagnostics and Unilab and the benefits expected to result
from the contemplated transaction, are based on management's current
expectations and estimates and involve risks and uncertainties that could cause
actual results or outcomes to differ materially from those contemplated by the
forward-looking statements.
Factors that could cause or contribute to such differences may include, but are
not limited to, the risk that the conditions relating to the required minimum
tender of Unilab shares or regulatory clearance might not be satisfied in a
timely manner or at all, risks relating to the integration of the technologies
and businesses of Quest Diagnostics and Unilab, unanticipated expenditures,
changing relationships with customers, suppliers and strategic partners,
conditions of the economy and other factors described in the most recent reports
on Form 10-Q, most recent reports on Form 10-K, and other periodic reports filed
by Quest Diagnostics and Unilab with the Securities and Exchange Commission.
ADDITIONAL INFORMATION:
On May 15, 2002, Quest Diagnostics filed a Registration Statement on Form S-4,
as amended, and a Schedule TO, as amended, and Unilab filed a
Solicitation/Recommendation Statement on Schedule 14D-9, as amended, with the
Securities and Exchange Commission in connection with the transaction. A
Prospectus, which is part of the Registration Statement on Form S-4, the
Solicitation/Recommendation Statement on Schedule 14D-9, and related exchange
offer materials, including a letter of election and transmittal, has been mailed
to stockholders of Unilab. In addition, Quest Diagnostics has previously filed a
Statement on Schedule 13D, as amended, relating to its agreement with Kelso
Investment Associates VI, L.P. and KEP VI, LLC. Investors and stockholders of
Unilab are urged to read all of these documents carefully. These documents
contain important information about the transaction and should be read before
any decision is made with respect to the exchange offer. Investors and
stockholders are able to obtain free copies of these documents through the
website maintained by the Securities and Exchange Commission at
http://www.sec.gov . Free copies of these documents may also be obtained from
Quest Diagnostics by directing a request to Quest Diagnostics Incorporated at
One Malcolm Avenue, Teterboro, New Jersey, 07608, or from Unilab by directing a
request to Unilab Corporation at 18448 Oxnard Street, Tarzana, California,
91356.
In addition to the Registration Statement on Form S-4, Schedule TO, Prospectus,
Solicitation/Recommendation Statement on Schedule 14D-9 and related exchange
offer materials, both Quest Diagnostics and Unilab file annual, quarterly and
special reports, proxy statements and other information with the Securities and
Exchange Commission. You may read and copy any reports, Statements or other
information filed by Quest Diagnostics or Unilab at the SEC public reference
room at 450 Fifth Street, N.W., Washington, D.C., 20549, or at any of the
Securities and Exchange Commission's other public reference rooms in New York,
New York and Chicago, Illinois. Please call the Securities and Exchange
Commission at 800-SEC-0330 for further information on the public reference
rooms. Quest Diagnostics' and Unilab's filings with the Securities and Exchange
Commission are also available to the public from commercial document-retrieval
services and at the website maintained by the Securities and Exchange Commission
at http://www.sec.gov .
SOURCE Quest Diagnostics Incorporated
CONTACT: Laure Park, Investors, +1-201-393-5030, or Gary Samuels, Media,
+1-201-393-5700, both of Quest Diagnostics Incorporated
URL: http://www.questdiagnostics.com
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