Transaction to generate significant synergies and expand geographic reach
Establishes leading position in testing-related business serving life insurance industry
Lyndhurst, N.J. and Lenexa, Kansas, August 8, 2005 – Quest Diagnostics Incorporated (NYSE: DGX), the nation�s leading provider of diagnostic testing, information and services, announced today that it has signed a definitive agreement to acquire LabOne, Inc. (Nasdaq: LABS). Under the terms of the agreement, which was unanimously approved by both companies� Boards of Directors, Quest Diagnostics will acquire all outstanding common shares of LabOne for $43.90 per share in a cash transaction valued at $934 million, after the assumed settlement of LabOne�s convertible debt for $132 million.
LabOne provides health screening and risk assessment services to life insurance companies, as well as clinical diagnostic testing services to healthcare providers and drugs-of-abuse testing to employers. LabOne, which is headquartered in Lenexa, Kansas, reported revenues of $468 million for the year ended December 31, 2004, and has 3,100 employees. LabOne operates major laboratories in Lenexa, Kansas, and Cincinnati, Ohio, as well as a state-of-the-art call center in Lee�s Summit, Missouri, and provides paramedical examination services throughout the United States and Canada.
�This acquisition will generate significant synergies, solidify our leadership position in diagnostic testing by expanding access for physicians and patients, and strengthen our drugs of abuse testing business,� said Surya N. Mohapatra, Ph.D., Chairman and Chief Executive Officer of Quest Diagnostics. �In addition, it will establish us as the leader in a new, testing-related business, providing health screening and risk assessment services to the life insurance industry. Our industry-leading access and distribution will complement the existing LabOne network and will enhance convenience for life insurance applicants and accelerate growth in the risk assessment business.�
Dr. Mohapatra continued: �We look forward to bringing together two organizations with complementary operations that are dedicated to quality, service and innovation, and I am pleased that Tom Grant will join Quest Diagnostics and lead the combined businesses serving the life insurance industry and employers.� �I believe this is an attractive transaction for our shareholders and will deliver significant value to them. I am also excited about the benefits to our customers and employees of joining with Quest Diagnostics,� said W. Thomas Grant II, Chairman and Chief Executive Officer of LabOne. �Our customers will have access to Quest Diagnostics� extensive network of laboratories, patient service centers and logistics capabilities. In addition, they will benefit from its innovative science and technology, including Quest Diagnostics Nichols Institute and advanced healthcare IT solutions. Our employees will benefit from becoming part of an industry leader with a focus on patients, growth and people.�
The transaction, which is expected to be completed during the fourth quarter of 2005, is subject to the satisfaction of customary conditions, including LabOne�s shareholder approval and regulatory clearance. Quest Diagnostics expects to finance the transaction through a combination of cash on hand, available credit facilities and public debt. The acquisition is not expected to have a material impact on Quest Diagnostics� 2005 earnings per share, excluding anticipated charges associated with the transaction. Quest Diagnostics expects the transaction to generate annual synergies of approximately $30 million upon completion of the integration, which is expected to occur within two years of closing. In 2006, the transaction is expected to be modestly accretive to earnings. Quest Diagnostics is the leading provider of diagnostic testing services, serving more than half a million patients per day, with 2004 revenues of $5.1 billion and 39,000 employees. It maintains 35 full-service testing laboratories in major metropolitan areas across the country as well as 140 rapid-response laboratories and 2,000 conveniently located patient service centers, where specimens are collected.
Headquartered in the Greater Kansas City area, LabOne is a diagnostic services provider. The services and information LabOne and its subsidiaries provide include: risk assessment information services for the insurance industry; diagnostic healthcare testing to physicians, hospitals, managed care organizations and employers; and drug testing services and related employee qualification products to employers and the government. The company’s web site is located at http://www.LabOne.com.
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.