8-KOther EventsExhibits & Filings

QUEST DIAGNOSTICS INC 8-K Report, Corporate Update (Apr 16, 2007)

Filed April 16, 2007For Securities:DGX

Summary

Quest Diagnostics Incorporated (DGX) announced on April 16, 2007, a significant strategic move with the signing of a definitive agreement to acquire AmeriPath, Inc. for approximately $2 billion in an all-cash transaction. This acquisition, which is expected to close in the second quarter of 2007, is subject to regulatory approval and other customary conditions. The company anticipates a minimal impact on its 2007 earnings per share, with modest accretion expected in 2008, prior to any transaction-related charges. The financing for this substantial acquisition will be managed through a combination of new debt facilities. Quest Diagnostics plans to utilize a $1 billion one-year bridge loan and a $1.5 billion five-year term loan, both underwritten by Morgan Stanley, to fund the acquisition and refinance existing debt from AmeriPath and a recent HemoCue acquisition. The bridge loan is intended to be refinanced shortly after the deal's completion.

Key Highlights

  • 1Quest Diagnostics to acquire AmeriPath, Inc. for approximately $2 billion in an all-cash deal.
  • 2Transaction includes assumption of approximately $770 million in AmeriPath's debt.
  • 3Acquisition is expected to close in the second quarter of 2007, pending regulatory approval.
  • 4Minimal impact expected on 2007 EPS, with modest accretion projected for 2008 EPS (pre-charge).
  • 5Financing will be secured through a $1 billion one-year bridge loan and a $1.5 billion five-year term loan.
  • 6Morgan Stanley committed to underwriting both new debt facilities.
  • 7Acquisition also aims to refinance existing debt from AmeriPath and the recent HemoCue acquisition.

Frequently Asked Questions

This 8-K filing announces that Quest Diagnostics Incorporated has entered into a definitive agreement to acquire AmeriPath, Inc. for approximately $2 billion in cash. It also details the financing plan for the acquisition.

Quest Diagnostics expects the acquisition to have a minimal impact on its earnings per share (EPS) in 2007. A modest increase in EPS is anticipated for 2008, before accounting for any transaction-related charges.

The company plans to finance the acquisition through a combination of new debt. This includes a $1 billion one-year bridge loan and a $1.5 billion five-year term loan, both committed to be underwritten by Morgan Stanley. This financing will also cover the refinancing of existing debt from AmeriPath and a prior acquisition.

The transaction is anticipated to be completed during the second quarter of 2007, contingent upon the satisfaction of customary conditions, including obtaining regulatory clearance.