Quest Diagnostics Inc., a giant medical testing company, has agreed to pay $934 million in cash for LabOne Inc., a growing player in the life and health insurance underwriting testing market.[@@]
The deal is subject to approval by LabOne shareholders and antitrust regulators, but Quest, Lyndhurst, N.J., and LabOne, Lenexa, Kan., say they hope to complete the deal by the end of the year.
Quest has 39,000 employees and generated $5.1 billion in 2004 revenue.
LabOne has 3,00 employees. It is reporting $7.8 million in net income for the second quarter on $128 million in sales revenue, up from $6.3 million in net income on $117 million in revenue for the second quarter of 2004.
W. Thomas Grant II, chairman of LabOne, will go to work for Quest as leader of its life insurance underwriting business once the deal is completed, Quest says.
The deal “will establish us as the leader in a new, testing-related business, providing health screening and risk assessment services to the life insurance industry,” says Quest Chairman Surya Mohapatra in a statement. “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.”