$2 Billion Acquisition For Quest Diagnostics

NJBIZ, Apr 23, 2007 by Daks, Martin C

LASTWEEK Quest Diagnostics Inc. announced a deal to buy AmeriPath Inc. for $2 billion, including the assumption of $770 millionin AmeriPath debt. Based in East Hanover, Quest provides diagnostic testing, information and other health care-related services. AmeriPath, based in Palm Beach Gardens, FIa., provides clinical-laboratory, diagnostic and other services. It has been controlled by the private equity firm of Welsh, Carson, Anderson and Stowe.

Quest says it expects to complete the acquisition during the second quarter of 2007. It will pay for the deal by refinancing AmeriPath1 s existing debt, and with the proceeds of a new $1 billion one-year bridge loan and a new five-year $1.5 billion term loan.

Quest earned $105.9 million on $1.53 billion of revenue in the first quarter of 2007, down from $144.6 million of net income on $1.55 billion of revenue for the prior-year period. Late last week Quest shares were trading at about $50, near their 52-week low of $48.07 posted March 14. The stock reached a 52-week high of $64.69 on Aug. 30,2006.

-Martin C Daks