Quest Diagnostics has acquired ConVerge Diagnostic Services from Water Street Healthcare Partners, boosting Quest's growth strategy in New England, US.
The transaction includes ConVerge's laboratory in Peabody, Massachusetts, and its patient service centres operating in Massachusetts, New Hampshire and Connecticut.
ConVerge will now operate as a wholly owned subsidiary of Quest Diagnostics and its laboratory will operate under Quest Diagnostics' national laboratory network.
The Converge lab will later be integrated into a new lab facility, which Quest is being built in Marlborough, Massachusetts.
Quest Diagnostics president and CEO Steve Rusckowski said ConVerge is company's fourth laboratory acquisition this year, and the second in Massachusetts, underscoring our commitment to the state and New England.
"As a regional leader in women's health that is also recognised for customer service, medical expertise and innovation, ConVerge is a strong strategic fit with our business," Rusckowski said
"The addition of ConVerge to the Quest family will extend the range of diagnostic information services patients and providers can access in the region, while also combining the considerable medical leadership of both companies to spur new innovations that improve patient outcomes."
Quest has been divesting non-core assets of late. Since late last year, Quest has sold its OralDNA dental diagnostics business, HemoCue diagnostic products business, Ibrutinib royalty rights and Enterix colorectal-cancer product business, generating gross proceeds of about $800m.
This is Quest Diagnostics' fourth announcement regarding an acquisition of a laboratory business in 2013.
In January, the company completed the acquisition of the clinical and anatomic-pathology outreach laboratory businesses of Massachusetts-based UMass Memorial Medical Center.
In April, Quest Diagnostics announced plans to acquire the lab-related clinical outreach operations of Dignity Health in California and Nevada, followed by acquisition of Concentra's Laboratory Business in May 2013.
The acquisition of ConVerge is strategically aligned with Quest Diagnostics' acquisition of UMass Memorial Medical Center.
This acquisition is consistent with company's five-point strategy to refocus on its core diagnostic information services business, drive operational excellence, restore growth, simplify the organisation and deliver disciplined capital deployment, which it unveiled at its Investor Day conference in November 2012.
ConVerge director and partner with Water Street Jim Connelly said the company has invested its team's industry expertise and experience to build ConVerge into a leading regional reference laboratory known for innovation and outstanding customer service.
"We are pleased that the leadership of Bob Gorman and the efforts he and his team have put into expanding ConVerge's test menu and capabilities, particularly in the area of women's health resulted in the company being acquired by the global industry leader in diagnostic information services with the vision to build on these strengths," Connelly said.
Quest expects the acquisition to be neutral to adjusted earnings per share in 2013 and modestly accretive to earnings per share in 2014.