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Quest buys LabOne: It's all about Synergies

For the past several years, Quest has successfully embarked on a consolidation strategy designed to serve its goal of gaining a competitive advantage, in laboratory testing, with superior distribution strength and increased patient access in a high-volume, low-margin industry. Quest's acquisition of LabOne is consistent with those objectives.

Quest Diagnostics Inc. , the leader in the clinical laboratory industry, announced that it will acquire LabOne Inc. for $43.90 per share, or $934 million in cash, after the assumption of $132 million in convertible debt. [See Deal] LabOne's $468 million in revenues last year came from three business segments: health screening and risk assessment services for insurance companies, clinical laboratory services, and testing for drugs of abuse. The deal awaits approval, which company officials expect will come in the fourth quarter of this year.

Both leading clinical laboratories—Quest as well as Laboratory Corp. of America Holdings —have, for the past five years, been successfully executing a consolidation strategy designed to help them realize...

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