Exhibit 99.1
QUEST DIAGNOSTICS TO ACQUIRE LABONE FOR $934 MILLION IN CASH
--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.
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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.
Conference Call Scheduled Quest Diagnostics and LabOne will discuss the
transaction during a joint conference call for investors today. Details are as
follows:
Time: 8:30 a.m. Eastern Time
Domestic Dial-in: 888-454-5684
Password: "Investor"
To hear a simulcast of the call over the Internet or a replay, registered
analysts may access StreetEvents at: www.streetevents.com; and all others may
access the Quest Diagnostics website at: www.Quest Diagnostics.com. In addition,
a replay of the call will be available from 11 a.m. today through 11 p.m. on
August 22, 2005 to investors in the U.S. by dialing 888-568-0443. Investors
outside the U.S. may dial 402-530-7976. No password is required for either
number.
Earlier today, LabOne reported financial results for the second quarter ended
June 30, 2005. LabOne will not conduct its conference call previously scheduled
for today at 11:00 a.m. Eastern Time.
Additional Information
In connection with the proposed transactions, Quest Diagnostics and LabOne
intend to file relevant materials with the Securities and Exchange Commission
(SEC), including a proxy statement. Because those documents will contain
important information, holders of LabOne common stock are urged to read them
carefully, when they become available. When filed with the SEC, they will be
available free of charge (along with any other documents and reports filed with
the SEC by Quest Diagnostics and LabOne) at the SEC's Web site, www.sec.gov, and
LabOne stockholders will receive information at an appropriate time on how to
obtain these documents and reports free of charge from LabOne. Such documents
are not currently available.
Quest Diagnostics and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the holders of LabOne common
stock in connection with the proposed transactions. Information about the
directors and executive officers of Quest Diagnostics is set forth in the proxy
statement for Quest Diagnostics' 2005 Annual Meeting of Shareholders, which was
filed with the SEC on March 31, 2005. Investors may obtain additional
information regarding the interest of such participants by reading the proxy
statement when it becomes available.
LabOne and its directors and executive officers may be deemed to be participants
in the solicitation of proxies from the holders of LabOne common stock in
connection with the proposed transaction. Information about the directors and
executive officers of LabOne and their ownership of LabOne common stock is set
forth in the proxy statement for LabOne's 2005 Annual Meeting of Stockholders,
which was filed with the SEC on April 19, 2005. Investors may obtain additional
information regarding the interests of such participants by reading the proxy
statement when it becomes available.
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About LabOne
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.
The statements in this press release, which are not historical facts or
information, may be forward-looking statements. These forward-looking statements
involve risks and uncertainties that could cause actual results and outcomes to
be materially different. Certain of these risks and uncertainties may include,
but are not limited to, statements concerning the financial condition, results
of operations and businesses of Quest Diagnostics and LabOne. The benefits
expected to result from the contemplated transaction are based on management's
current expectations and estimates, and involve risks and uncertainties that
could cause actual results or outcomes to differ materially from those
contemplated by the forward-looking statements.
Factors that could cause or contribute to such differences may include, but are
not limited to, the risk that the conditions relating to the approval by LabOne
shareholders or regulatory clearance might not be satisfied in a timely manner
or at all, risks relating to the integration of the technologies and businesses
of Quest Diagnostics and LabOne, unanticipated expenditures, competitive
environment, changes in government regulations, changing relationships with
customers, payers, suppliers and strategic partners and other factors described
in the Quest Diagnostics Incorporated and LabOne 2004 Form 10-K and subsequent
filings.
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