Healthscope bids also fuel speculation of a big clinical pathology transaction
Last week in Australia, investment insiders shared rumors that Quest Diagnostics Incorporated (NYSE: DGX) was interested in acquiring Sonic Healthcare Ltd. (ASX: SHL). However, press stories discounted the possibility of a deal between these two billion-dollar clinical pathology laboratory behemoths. Neither company has issued a public statement addressing this issue.
In assessing the possibility of Quest Diagnostics acquiring Sonic Healthcare, the Sydney Morning Herald (SMH) threw cold water on the idea. It pointed out that Sonic’s stock price is trading at a multiple of 10.8 times earnings before interest, taxes, depreciation, and amortization (EBITDA). That would make Sonic an expensive purchase for Quest Diagnostics, since Quest’s share price trades at a multiple of seven times EBITDA. Further, SMH’s reporter pointed out that Sonic’s market capitalization of A$5.7 billion would make it a major acquisition for Quest Diagnostics, which has a market capitalization of U.S.$9.5 billion.
Consumer products giant acquires 100% ownership of concierge medicine company
Clinical laboratories and pathology groups may soon be serving physician practices owned by Procter & Gamble (P&G) (NYSE:PG). That’s because the consumer products giant now owns 100% of MDVIP, a nationwide concierge practice of 350 doctors in 28 states.
The deal is noteworthy because it further expands Procter & Gamble’s presence in healthcare. In 2006, P&G invested $325 million in a joint venture with Inverness Medical (NYSE:IMA). The joint venture announced its intention to develop and market diagnostic test kits for use by consumers that can be sold in retail outlets. At the time, The Dark Report wrote that, “P&G’s interest in consumer self testing is based on its belief that consumer demand for health services and healthcare products will soar in the coming decades.” (See The Dark Report, June 4, 2007, “ Inverness Buys Biosite, Has New Venture with P&G” )
Agreement to acquire East Side Clinical Laboratory is a reminder that Sonic remains an active buyer of clinical laboratories
It’s another clinical lab acquisition and a new regional market for Sonic Healthcare Limited (ASX:SHL). Yesterday the Australian-based lab company established a beachhead in New England when it acquired East Side Clinical Laboratory, based in Providence, Rhode Island.
Consolidation continues in the lab testing sector that serves physicians’ offices
Last week it was disclosed that the health system which owns Centrex Clinical Laboratories, Inc. is selling its laboratory testing business to Laboratory Corporation of America (NYSE: LH ). Faxton-St. Luke’s Healthcare stated that it expected the transaction would be finalized by the end of the year.
Several times in recent years, Faxton-St. Luke’s Healthcare shopped Centrex Clinical Labs to interested buyers. For that reason, news of the sale to LabCorp did not surprise informed observers.
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