8-KMaterial AgreementsExhibits & Filings

QUEST DIAGNOSTICS INC 8-K Report, Material Agreement (Apr 19, 2007)

Filed April 19, 2007For Securities:DGX

Summary

Quest Diagnostics Incorporated (DGX) announced on April 19, 2007, the signing of a definitive Agreement and Plan of Merger to acquire AmeriPath Group Holdings, Inc. (AmeriPath). The transaction, expected to close in the second quarter of 2007, involves the merger of a Quest Diagnostics subsidiary with AmeriPath, making AmeriPath a wholly-owned subsidiary of Quest Diagnostics. The acquisition is structured with a base cash consideration of $2 billion, adjusted for AmeriPath's net debt, transaction expenses, and outstanding stock options. Quest Diagnostics plans to finance the acquisition, along with refinancing existing debt from its recent HemoCue acquisition, through new committed debt facilities totaling $2.5 billion, underwritten by Morgan Stanley. This includes a $1 billion one-year bridge loan and a $1.5 billion five-year term loan, with the bridge loan intended for refinancing post-merger. Additionally, Morgan Stanley will underwrite a $750 million revolving credit facility to replace Quest Diagnostics' current credit facility.

Key Highlights

  • 1Quest Diagnostics to acquire AmeriPath Group Holdings, Inc. for approximately $2 billion, plus adjustments.
  • 2Merger expected to be completed in the second quarter of 2007, subject to customary closing conditions.
  • 3Acquisition financed through a combination of a $1 billion bridge loan and a $1.5 billion term loan from Morgan Stanley.
  • 4Existing AmeriPath debt and debt from the January 2007 HemoCue acquisition will be refinanced.
  • 5A new $750 million revolving credit facility will replace Quest Diagnostics' existing credit facility, also underwritten by Morgan Stanley.
  • 6AmeriPath's majority stockholder, Welsh, Carson, Anderson & Stowe IX, L.P., has already approved the merger.
  • 7No further stockholder consents are required for the merger agreement to be adopted.

Frequently Asked Questions

This 8-K filing announces Quest Diagnostics Incorporated's definitive agreement to acquire AmeriPath Group Holdings, Inc. It details the terms of the merger, the purchase price considerations, and the financing arrangements for the transaction.

Quest Diagnostics plans to finance the AmeriPath acquisition and refinance existing debt through new committed credit facilities underwritten by Morgan Stanley. This includes a $1 billion one-year bridge loan and a $1.5 billion five-year term loan. A new $750 million revolving credit facility will also be put in place.

The base purchase price is $2 billion in cash. However, the final amount will be adjusted based on AmeriPath's unrestricted cash balance, its indebtedness as of the closing date, transaction expenses, and the aggregate exercise price of vested AmeriPath stock options.

The transaction is anticipated to be completed during the second quarter of 2007, contingent upon the satisfaction of standard closing conditions, including the expiration of the Hart-Scott-Rodino waiting period.