Friday, February 24, 2017
Laboratory Corporation of America® Holdings, 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).
“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.
