October 2007
In mid-September, LabCorp (Burlington, NC) quietly reached an agreement to acquire Pathology Associates Labs (PA Labs; Muncie, IN), which was originally formed from a merger of Pathologists Associated and Follas Labs. The laboratory is a joint venture between Cardinal Health Systems and East Central Indiana Pathology. Financial terms of the deal were not disclosed.
With approximately 550 employees in 52 locations throughout Indiana, PA Labs offers testing in the areas of anatomic pathology, hematology, thrombosis, employment drug testing, cytopathology, toxicology, immunology, endocrinology, microbiology, and flow cytometry. More than 98% of its tests are performed locally, with results provided within 24 hours.
The acquisition of PA Labs would give LabCorp a stronghold in Quest-dominated Indiana. The state’s largest laboratory, Mid America Clinical Laboratories (Indianapolis, IN), is a joint venture owned by and in partnership with Quest, Community Hospital, St. Vincent Hospital, and CoLab. In 2006, Mid America Clinical Labs performed approximately 4.5 million tests.
Also notable is PA Labs’s specialty in anatomic pathology. In discussing near-term opportunities for revenue growth in the lab industry at the UBS Global Life Sciences conference on September 25, LabCorp CEO Dave King noted, "There will be opportunities for growth as a result of the integration of Ameripath into our competitor," referring to Quest’s recent acquisition of the pathology powerhouse in a transaction valued at $2 billion.
The pending deal for PA Labs comes in the wake of LabCorp’s recent acquisition of DSI Laboratories (Fort Myers, FL), which it purchased from NCH Healthcare System (Naples, FL) for approximately $75 million. DSI is a reference and toxicology lab that operates a core lab in Fort Meyers, hospital laboratories in Naples and North Collier, and the Bonita Community Center Laboratory.
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October 2007 - Table of Contents
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