-- Establishes Leading Position in Cancer Diagnostics with a Focus on
Dermatopathology, Anatomic Pathology and Molecular Diagnostics --
-- Strengthens Leadership in Hospital and Esoteric Testing --
-- Enhances Position as World's Premier Diagnostic Testing Company --
LYNDHURST, N.J. and PALM BEACH GARDENS, Fla., April 16
/PRNewswire-FirstCall/ -- Quest Diagnostics Incorporated (NYSE: DGX), the
leading provider of diagnostic testing, information and services, and
AmeriPath, Inc., a national diagnostic testing company, announced today that
Quest Diagnostics has signed a definitive agreement to acquire AmeriPath in an
all cash transaction valued at approximately $2 billion, including
approximately $770 million in debt at closing. AmeriPath, a company
controlled by Welsh, Carson, Anderson and Stowe IX, L.P., is a leading
provider of dermatopathology, anatomic pathology and esoteric testing with
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 an
industry-leading 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.
Conference Call Scheduled
Quest Diagnostics will discuss the transaction during a conference call
for investors today. During the call, the company will not discuss its first
quarter 2007 earnings, which will be released on April 19, 2007. Details for
today's call are as follows:
Time: 8:30 a.m. Eastern Time
Dial-in: 888-454-5684
Password: Investor
To hear a simulcast of the call over the Internet or a replay, registered
analysts may access StreetEvents at: www.streetevents.com; and all others may
access the Quest Diagnostics website at: www.questdiagnostics.com. In
addition, a replay of the call will be available from 11 a.m. today through 11
p.m. on May 14 to investors in the U.S. by dialing 888-568-0349. Investors
outside the U.S. may dial 203-369-3465. No password is required for either
number.
About Welsh, Carson, Anderson and Stowe IX, L.P.
Welsh, Carson, Anderson and Stowe is one of the largest and most
successful private equity investment firms in the United States. Since its
founding in 1979, Welsh Carson has organized 14 investment partnerships with
capital of more than $16 billion.
About AmeriPath
AmeriPath, a leading national provider of physician-based anatomic
pathology, dermatopathology and molecular diagnostic services to physicians,
hospitals, clinical laboratories and surgery centers, supports community-based
medicine by helping physicians provide excellent and effective care for their
patients. A team of sub-specialized pathologists and Ph.D. scientists provide
medical expertise, diagnostic quality, and personal consultation services.
AmeriPath's team of approximately 400 highly trained, board-certified
pathologists provide medical diagnostics services in outpatient laboratories
owned, operated and managed by AmeriPath, as well as in hospitals and
ambulatory surgical centers.
About Quest Diagnostics
Quest Diagnostics is the leading provider of diagnostic testing,
information and services that patients and doctors need to make better
healthcare decisions. The company offers the broadest access to diagnostic
testing services through its national network of laboratories and patient
service centers, and provides interpretive consultation through its extensive
medical and scientific staff. Quest Diagnostics is a pioneer in developing
innovative new diagnostic tests and advanced healthcare information technology
solutions that help improve patient care. Additional company information is
available at: www.questdiagnostics.com.
The statements in this press release, which are not historical facts or
information, may be forward-looking statements. These forward-looking
statements involve risks and uncertainties that could cause actual results and
outcomes to be materially different. Certain of these risks and uncertainties
may include, but are not limited to, statements concerning the financial
condition, results of operations and businesses of Quest Diagnostics and
AmeriPath. 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 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
AmeriPath, unanticipated expenditures, competitive environment, changes in
government regulations, changing relationships with customers, payers,
suppliers and strategic partners and other factors described in the Quest
Diagnostics Incorporated and AmeriPath 2006 Forms 10-K and subsequent filings.
SOURCE Quest Diagnostics Incorporated; AmeriPath, Inc.
CONTACT: investors, Laure Park, +1-201-393-5030; media, Gary Samuels and
Nancy Fitzsimmons, +1-201-393-5700, all for Quest Diagnostics; or Donald E.
Steen, Chairman and CEO, or David L. Redmond, President and CFO,
+1-561-712-7365, both of AmeriPath, Inc.