Quest Diagnostics buys AmeriPath from private equity firm

Posted Apr 16th 2007 3:00PM by Tom Taulli
Filed under: Private Equity, Morgan Stanley (MS)

Private equity firm Welsh, Carson, Anderson and Stowe has been around since the late 1970s and has a strong background in the medical space.

Well, back in 2003, the buyout firm purchased AmeriPath for $658.8 million. The developer of cancer-diagnostics has grown through some deals and posted sales of $800 million last year.

Now Welsh Carson is selling the company to Quest Diagnostics (NYSE: DGX) for $2 billion (if you include the $770 million in debt). To get the deal done, Quest will be using the $2.5 billion in financing from Morgan Stanley (NYSE: MS).

The transaction will not have much of an impact on Quest, at least in the short-run. But the growth opportunity does look good for AmeriPath, and Quest will pick up leadership in dermatopathology and anatomic pathology -- which are growing quickly.

On the news, Quest's stock fell 4.70% to $51.76.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Tags: AmeriPath, DGX, MS, Welsh, Carson, Anderson and Stowe, Welsh,Carson,AndersonAndStowe