Quest Diagnostics to acquire AmeriPath in $2 billion transaction

By Lisa Kerner

Charlotte, N.C., April 16 - Quest Diagnostics Inc. signed a definitive agreement to acquire AmeriPath, Inc. in an all-cash transaction valued at about $2 billion, including some $770 million in debt.

The transaction is expected to be completed during the second quarter of 2007.

Quest Diagnostics said proceeds from a new $1 billion one-year bridge loan and a new five-year $1.5 billion term loan, both underwritten by Morgan Stanley, will be used to finance the transaction, to refinance AmeriPath's existing debt and to refinance the debt from the HemoCue acquisition completed earlier this year.

"This acquisition will establish our leading position in cancer diagnostics with a focus on dermatopathology, anatomic pathology and molecular diagnostics," Quest Diagnostics chairman and chief executive officer Surya N. Mohapatra said in a company news release.

"AmeriPath is respected for its leadership in dermatopathology and anatomic pathology, two of the fastest-growing segments in diagnostic testing. 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 is a diagnostic test company based in Palm Beach Gardens, Fla., that is controlled by equity investment firm Welsh, Carson, Anderson and Stowe.

Quest Diagnostics, located in Lyndhurst, N.J., provide diagnostic testing, information and services.

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