Quest Strengthens Its Hand
Executive Summary
Quest Diagnostics' purchase of American Medical Laboratories for $500 million in cash (including assumption of $160 million in debt) is one of a string of acquisitions made by large national laboratories in recent years. While it is by no means Quest's biggest or most strategically critical deal, it gives the nation's largest clinical laboratory a presence in two markets in which it was weak or had no presence, and shores up its rapidly growing esoteric testing business. The deal also eliminates a competitor.
You may also be interested in...
Anatomic Pathology: Aggressive Buyers or Anxious Seller?
LabCorp.'s proposed purchase of Dianon Systems, followed by the announcement of Welsh Carson's bid for AmeriPath, reflect different paths taken by two fierce competitors.They are also the inevitable consequence of rapid laboratory consolidation at the national level. LCA wants Dianon so that it can expand its position in cancer testing. Welsh Carson, in contrast, is a financial buyer who would have to "clean up" AmeriPath, which has run into difficulties due to its physician practice management business model.
A Temporary Blip or A Long-Term Slowdown for Lab Giants?
Quest and Laboratory Corp. of America, two Wall Street favorites for several years, seem to be bumping up against a wall when it comes to growth. Their growth is heavily dependent on acquisitions--but there aren't many big labs left to buy. Lab Corp.'s just announced offer for Dianon not withstanding. Quest's bid to buy California-based Unilab, is under FTC scrutiny--although Wall Street is betting the deal will fly. Lab Corp. faces intense regional competition, which it claims it is addressing. Still, the bigger these companies get, the tougher it is to maintain growth.
US Q1 Consumer Health Earnings Preview: Label This One Historic And Challenging But Promising
US OTC drug and supplement firms’ reports of results for the first three months of 2024 began on April 19 with P&G. JP Morgan analysts say while “some retailers in the US in particular” are reducing consumer health inventories, for the overall sector they expect “a healthier balance of positive volume and lower pricing contribution.”