Laboratory Corporation of America® Holdings (LabCorp®)
(NYSE:LH), Providence Health & Services (Providence) and
Catholic Health Initiatives (CHI), today announced that they have
entered into a definitive agreement for LabCorp to acquire all
of the ownership interest in Pathology Associates Medical
Laboratories, LLC, (PAML), one of the nation’s premier medical
reference laboratories and a healthcare solutions company jointly
owned by Providence and CHI. In addition to PAML, LabCorp will also
acquire PAML’s interest in the following joint ventures: Colorado
Laboratory Services (CLS), Kentucky Laboratory Services (KLS),
MountainStar Clinical Laboratories (MSCL), PACLAB Network
Laboratories (PACLAB) and Tri-Cities Laboratory (TCL).
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“This signature transaction strengthens LabCorp’s relationships
with anchor health systems and expands LabCorp’s geographic
presence into important markets,” said David P. King, chairman and
chief executive officer, LabCorp. “We have always admired the
commitment of PAML, its owners and its joint venture partners to
providing high-quality, community-based laboratory services.
LabCorp shares that same vision and commitment, and is excited to
work with these industry-leading health systems and hospitals as
partners to continue to provide these services.”
Headquartered in Spokane, Washington, PAML and its joint
ventures provide laboratory services in California, Colorado,
Idaho, Kentucky, Montana, Oregon, Utah and Washington. PAML is an
industry leader in joint venture partnerships with community-based
hospitals. The transactions involving PAML and the PAML-affiliated
joint ventures expand LabCorp’s geographic scope in the Pacific
Northwest, Midwest and South. LabCorp currently provides services
to several Swedish Medical Center facilities in Seattle, a partner
within the Providence system.
“We are proud of the high-quality service PAML and its joint
ventures have provided,” said Mike Butler, president of operations,
chief executive, Providence Health & Services. “We routinely
evaluate how to best deliver health care services to the
communities we serve and LabCorp will continue to meet the rapidly
changing needs of patients and providers.”
In addition, the hospital co-owners of CLS, based in Lakewood,
Colorado; KLS, based in Lexington, Kentucky; and PACLAB Network
Laboratories, based in Renton, Washington; have all agreed to sell
their joint venture interests to LabCorp.
The hospital partners in MSCL, based in Salt Lake City, Utah,
and in TCL, based in Kennewick, Washington, continue to evaluate
future options for their ownership of the joint venture, which may
include a sale to LabCorp. The hospital co-owner of Alpha Medical
Laboratory (Alpha), a PAML-affiliated joint venture based in Coeur
d’Alene, Idaho, intends to acquire PAML’s interest in Alpha; after
which it will sell the joint venture assets to LabCorp upon final
board approval.
After the staged transactions are complete, Providence, CHI and
the hospital joint venture owners will continue to provide all
existing in-patient hospital laboratory services. LabCorp will then
continue to provide the outreach testing services and reference
laboratory services currently provided by PAML and the joint
ventures that are part of the overall transactions. The
transactions do not include any PAML joint venture services in
California.
“As part of our mission, CHI is focused on building healthier
communities. This goal guides our business decisions in the
constantly changing dynamics and demands of health care today,”
said Kevin Lofton, CEO, Catholic Health Initiatives. “We are
confident that our selection of LabCorp to be PAML’s new owner will
serve the best interests of all who rely on us to meet their health
care needs through comprehensive, high quality laboratory
services.”
The transactions are subject to customary closing conditions,
including clearance under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended. The parties anticipate that
transaction closings will begin in 2017 and continue into 2018.
There will be no changes to operations or services at PAML or the
joint ventures until the applicable transaction is complete. The
organizations will work together to plan and implement a smooth,
thoughtful transition that maintains continuity of services for
patients, hospitals, clients and clinicians while providing direct
access to the additional capabilities of LabCorp.
Other terms of the transactions were not disclosed and no
additional information is available at this time.
About Providence Health & Services
Providence Health & Services is committed to improving
the health of the communities it serves, especially for those who
are poor and vulnerable. In 2016, Providence provided nearly $1.2
billion in community benefit to help meet the needs of its
communities, both today and into the future. Providence Health
& Services is a part of Providence St. Joseph Health, a family
of organizations that includes 50 hospitals, 829 physician clinics,
senior services, supportive housing and many other health and
educational services. The health system and its partners employ
more than 100,000 caregivers serving communities across seven
states – Alaska, California, Montana, New Mexico, Oregon, Texas and
Washington. Along with Saint Joseph Health, PSJH includes: in
Texas, Covenant Health and Covenant Medical Group; in California,
Facey Medical Foundation, Hoag Memorial Hospital Presbyterian and
St. Joseph Heritage Healthcare; and in Washington, Kadlec Regional
Medical Center, Pacific Medical Centers and Swedish Health
Services.
About Catholic Health Initiatives
Catholic Health Initiatives, a nonprofit, faith-based health
system formed in 1996 through the consolidation of four Catholic
health systems, expresses its mission each day by creating and
nurturing healthy communities in the hundreds of sites across the
nation where we provide care. The nation’s third-largest nonprofit
health system, Englewood, Colorado-based CHI operates in 18 states
and comprises 103 hospitals, including four academic medical
centers and major teaching hospitals as well as 30 critical-access
facilities; community health-services organizations; accredited
nursing colleges; home-health agencies; senior living communities;
and other facilities and services that span the inpatient and
outpatient continuum of care. In fiscal year 2016, CHI provided
more than $1.1 billion in financial assistance and community
benefit – a 13% increase over the previous year -- for programs and
services for the poor, free clinics, education and research.
Financial assistance and community benefit totaled more than $2
billion with the inclusion of the unpaid costs of Medicare. The
health system, which generated operating revenues of $15.9 billion
in fiscal year 2016, has total assets of approximately $22.7
billion.
About LabCorp®
Laboratory Corporation of America® Holdings (NYSE: LH), an
S&P 500 company, is a world leading life sciences company,
providing comprehensive clinical laboratory and end-to-end drug
development services. With a mission to improve health and improve
lives, LabCorp delivers world-class diagnostic solutions, brings
innovative medicines to patients faster and uses technology to
provide better care. With net revenue in excess of $9 billion in
2016, LabCorp’s 50,000 employees serve clients in 60 countries. To
learn more about LabCorp, visit www.labcorp.com, and to learn more
about Covance Drug Development, visit www.covance.com.
Forward-Looking
Statements
This press release contains forward-looking statements including
with respect to LabCorp’s (the Company) estimated 2017 guidance and
the impact of various factors on operating and financial results.
Each of the forward-looking statements is subject to change based
on various important factors, including without limitation,
competitive actions in the marketplace and adverse actions of
governmental and other third-party payers. Actual results could
differ materially from those suggested by these forward-looking
statements. The Company has no obligation to provide any updates to
these forward-looking statements even if its expectations change.
Further information on potential factors that could affect
LabCorp’s operating and financial results is included in the
Company’s Form 10-K for the year ended December 31, 2015, and
subsequent Forms 10-Q, including in each case under the heading
risk factors, and in the Company’s other filings with the SEC. The
information in this press release should be read in conjunction
with a review of the Company’s filings with the SEC including the
information in the Company’s Form 10-K for the year ended December
31, 2015, and subsequent Forms 10-Q, under the heading MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
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version on businesswire.com: http://www.businesswire.com/news/home/20170223006674/en/
LabCorpScott Frommer, 336-436-5076VP, Investor
Relationsinvestor@labcorp.comorDonald Von Hagen, 336-436-8263VP,
Corporate Communicationsmedia@labcorp.comorProvidence Health
& ServicesColleen Wadden, 206-979-1620Senior Director,
Reputation ManagementPH&Smedia@providence.orgorCatholic
Health InitiativesMichael Romano, 303-383-2720National
Director, Media RelationsM:
303-549-8948michaelromano@catholichealth.net
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