EXHIBIT 99.1
Attention: Business Editors and Reporters
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FOR IMMEDIATE RELEASE
Dynacare announces acquisition agreement with LabCorp
Toronto, May 9, 2002 - Dynacare Inc. (TSE: DNA; Nasdaq: DNCR) announced today it
has entered a definitive agreement with Laboratory Corporation of America
Holdings (LabCorp) under which LabCorp (NYSE: LH) will acquire all of the
outstanding shares of Dynacare for US$480 million. In addition, LabCorp will
assume approximately US$205 million in Dynacare debt in conjunction with the
closing of the transaction.
Under the terms of the agreement, which was unanimously approved by the boards
of both companies, LabCorp will acquire 100 percent of the outstanding shares of
Dynacare common stock for US$23.00 per share pursuant to a Plan of Arrangement
under Canadian Law. Under the Plan of Arrangement, each outstanding share of
Dynacare common stock will be exchanged for US$11.50 in cash and 0.1164 shares
of LabCorp common stock. LabCorp will issue approximately 2.4 million new common
shares in connection with the transaction, based on Dynacare's approximately
20.9 million diluted shares outstanding. The cash component of the transaction
will be funded by a combination of cash on hand, borrowings under LabCorp's
existing credit facility and a new bridge loan facility.
Dynacare has grown from its Canadian roots to become a major clinical laboratory
company in North America. In Ontario, the company operates in partnership with
Gamma NorthPeel and Bio-Science Laboratory, and in Alberta in partnership with
Kasper Medical Laboratories and MDS Laboratories. The deal does not affect these
partnerships, as the existing management teams will be retained to exercise
control over the company's operations in Canada.
"Dynacare remains committed to staying on the cutting edge of diagnostic
services in Canada, and we're proud that our reputation for quality and
efficiency prompted LabCorp to enter into this agreement," said Harvey Shapiro,
President and Chief Executive Officer of Dynacare. "Through LabCorp, new doors
will open for Dynacare and our partners. We will have access to advanced
technologies and resources, as well as strengthened capabilities to help us
improve our front-line lab services and growth prospects."
LabCorp is one of the world's leading clinical laboratory providers, with annual
revenues of US$2.2 billion in 2001. Each day, the company performs diagnostic
procedures on specimens from approximately 280,000 patients and is recognized as
an industry leader in introducing new diagnostic technologies, including its
being the first U.S. clinical lab company to fully embrace genomic testing.
"Diagnostic testing is entering into new and exciting areas, including genetic
analysis, but the start-up costs can often be exorbitant," said Mr. Shapiro. "As
a result of this transaction, the economies of scale are now in place for
Dynacare and its partners to adopt technological innovations as they emerge,
which translates into better overall medical care."
Under separate agreements, Dynacare's two largest shareholders and certain
officers and directors, who hold in the aggregate 48.2 percent of Dynacare's
outstanding common stock, will irrevocably undertake to vote their shares in
favor of the Plan of Arrangement and, under certain circumstances, sell their
shares to LabCorp if the Agreement is terminated or the Arrangement does not
close. The offer and the merger are conditioned on, among other things, a
favorable vote by the holders of two-thirds of Dynacare's outstanding common
shares and regulatory approvals in the U. S. and Canada.
Dynacare has also announced the termination of its joint ventures in Pittsburgh,
PA and Schenectady, NY. These terminations are expected to result in an after
tax charge of approximately $4.7 million in Dynacare's second quarter.
Through its integrated network of regional laboratory operations, Dynacare
provides innovative and trusted clinical laboratory services to its clients,
their patients and professional partners. In addition to being a leading
provider of laboratory services in Canada, Dynacare provides laboratory services
in 21 U.S. states. Further information about Dynacare can be obtained from the
Company's web site at www.dynacare.com.
Launched in November of 2000, Dynagene, Dynacare's Center of Excellence for
Genetic and Esoteric Testing and Counseling, performs genetic reference work and
other esoteric testing for all Dynacare laboratories, as well as referring
physicians, and independent laboratories throughout North America. Dynagene
provides a full range of genetic services including prenatal, postnatal, and
cancer cytogenetics, FISH testing, molecular genetics, and genetic counseling.
Further information on Dynagene can be found on the Company's web site at
www.dynagene.com.
For Dynacare Investors
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This press release may contain "forward-looking statements" within the meaning
of Section 21E of the Securities Exchange Act of 1934. When used in this press
release, the words "may," "could," "should," "would," "believe," "anticipate,"
"estimate," "expect," "intend," "plan" and similar expressions or statements
regarding future periods are intended to identify forward-looking statements.
All forward-looking statements are inherently uncertain as they are based on
various expectations and assumptions concerning future events, which by their
nature involve substantial risks and uncertainties beyond Dynacare Inc.'s
control. Dynacare Inc. undertakes no obligation to update or revise any
forward-looking statement for events or circumstances after the date on which
such statement is made. Dynacare Inc. cannot assess the impact of or the extent
to which any single factor or risk, or combination of them, may cause actual
results to differ materially from those contained in any forward-looking
statements. For a more complete discussion of risk factors, please see Dynacare
Inc.'s filings with the Securities and Exchange Commission, including its Annual
Report on Form 10K for the year ended December 31, 2001.
Security holders of Dynacare Inc. are urged to read the proxy statement
regarding the proposed Plan of Arrangement when it is finalized and distributed
to security holders because it will contain important information for making an
informed decision. The definitive proxy statement will be filed with the U.S.
Securities and Exchange Commission (the"SEC") by Dynacare, and security holders
may obtain a free copy of such proxy statement when it becomes available, and
other documents filed with the SEC by Dynacare, at the SEC's website at
www.sec.gov. The definitive proxy statement, when it becomes available, and
other documents filed by Dynacare, may also be obtained free of charge by
directing a request to Dynacare Inc., 14900 Landmark Boulevard, Suite 200,
Dallas, Texas 75254, attention: Zbig S. Biskup, Executive Vice President and
Chief Financial Officer and Secretary.
Dynacare and it directors and executive officers may be deemed to be
participants in the solicitation of proxies from the security holders of
Dynacare in favor of the transaction. The directors and executive officers of
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Dynacare and their beneficial ownership of Dynacare common stock as of April 15,
2002 are set forth in the proxy statement for the 2002 annual meeting filed by
Dynacare on April 30, 2002. Security holders of Dynacare may obtain additional
information regarding the interests of such participants by reading the
definitive proxy statement when it becomes available.
For additional information, please contact:
Harvey Shapiro, President & CEO, Dynacare
(416) 322-2305
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