Dec 16, 2009 | Laboratory Management and Operations, Laboratory News, Laboratory Pathology
Acquisition is a deal between two private equity firms
Spectrum Laboratory Network of Greensboro, North Carolina, will be acquired by Welsh, Carson, Anderson, & Stowe. Investment funds managed by Apax Partners are the sellers and the purchase price is $230 million. It is the highest dollar value acquisition of a clinical laboratory during 2009.
The acquisition agreement was announced at the end of last week. It brings Welsh, Carson back into the laboratory testing industry for the first time since 2007. During this decade, Welsh, Carson held an equity ownership in LabOne, Inc., which was based in Kansas City, Missouri and was building a fast-growing business in medical laboratory testing.
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Sep 18, 2009 | Laboratory News, Laboratory Pathology
It was The Dark Report’s headline story ten years ago this month!
Introducing a new feature: Ten Years Ago in The Dark Report
To give Dark Daily readers better context about unfolding events in the laboratory industry, we are pleased to introduce this feature which will appear regularly. Each month, we will dive into our archives and share with you the key events of ten years ago, along with an update to those companies and laboratory executives.
American Medical Labs Merges with Associated Pathologists Lab in 1999
In its September 20, 1999 issue, The Dark Report disclosed that Las Vegas-based Associated Pathologists Laboratories (APL) would be merging with American Medical Laboratories (AML) of Chantilly, Virginia. This bi-coastal merger created the third largest commercial laboratory organization in the United States.
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Jul 16, 2007 | Laboratory News, News From Dark Daily
We are witnessing a major shift in philanthropy, which will have a major impact on how charitable dollars are spent to improve healthcare outcomes. Many philanthropists are happy to get the positive press that comes with a large donation and worry very little about what actually becomes of the money. This is not the case with the Bill & Melinda Gates Foundation. It is putting hundreds of millions of dollars into projects that will track and report on the actual improvements that result from charitable gifts.
The foundation made its second large gift to health care tracking this year, a $105 million grant to the University of Washington to measure the impact of public health programs globally. In 2005, the foundation donated $50 million to create the Health Metrics Network with the World Health Organization. Both of these large gifts from the Gates Foundation have similar purposes — to better track the private money spent on health and to use statistical measures to determine the effectiveness of the Foundation’s grant-giving. The 10-year Gates grant to the University of Washington will be combined with $20 million from the University to establish and operate the Institute for Health Metrics and Evaluation in Seattle. The 2005 Gates Foundation health care grant funds programs that generate information on health in developing countries.
The Institute for Health Metrics and Evaluation will collect and analyze data on health trends, such as the prevalence of major diseases and the availability of health services. It will also conduct independent evaluations of the effectiveness of health programs. Institute officials point out that there is an absence of available statistics in global health, particularly in contrast to the available data in business and other sectors. There is a possibility that such health program data is unavailable by design, and that the Institute may face resistance from governments and organizations that want to evade measurement.
The desire for the Gates Foundation to have greater transparency in health care is designed to put pressure on global health care and aid organizations to track and measure each dollar spent and results achieved. Organizations that cannot account for dollars spent and how these dollars benefited the recipients will likely see donors reluctant to make donations.
Because of the role of laboratory testing in early detection, diagnosis, therapeutic decisions, and ongoing monitoring of patient progress, the transparency drive of the Gates Foundation can be expected to increase both the utilization and societal value of laboratory testing. After all, lab test results provide objective benchmarks for validating all types of clinical, operational, and societal improvements.
Related Articles:
Gates Grant Targets Health Gauges
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Jul 12, 2007 | Laboratory News, News From Dark Daily
After the markets closed yesterday, General Electric (NYSE: GE) and Abbott Laboratories (NYSE: ABT) released announcements that the two companies had terminated the pending sale of Abbott’s two diagnostic business units to General Electric.
Abbott’s press release made the announcement in two sentences: “Abbott and GE have mutually agreed to terminate their contract for the sale of Abbott’s core laboratory and point-of-care diagnostics businesses to GE. The two companies were unable to agree on final terms and conditions of the proposed sale.”
GE’s press release said just a bit more: “General Electric announced today that GE and Abbott have agreed to mutually terminate their agreement relating to GE’s acquisition of Abbott’s primary in vitro and point-of-care diagnostics businesses. GE and Abbott worked diligently to complete the transaction but were unable to reach agreement on final terms and conditions. As a result, they agreed it was in the best interests of both companies to mutually terminate their agreement and discussions.”
The break-up of this deal is a significant development. For General Electric, it was a major healthcare acquisition. GE was ready to purchase Abbott’s primary in vitro diagnostics (IVD) business unit, along with a point-of-care testing business. Together, these Abbott businesses were estimated to generate about $2.5 billion in revenue last year. In fact, the price to be paid for of the Abbott diagnostics purchase was only slightly less than what GE paid for Amersham PLC in 2001, which was more than $9 billion.
There will be plenty of questions about why this deal fell apart. Was this a result of a changed financial picture at General Electric? Was something uncovered during due diligence that affected the acquisition as originally priced and structured – and the two parties could not negotiate a revised set of mutually-agreeable terms? Did either buyer or seller smell out a better deal, giving them motivation to see this acquisition agreement come apart?
Last year, Siemens (NYSE: SI) made similar investments to stake out a major position in the IVD marketplace. GE’s decision to abandon its acquisition of Abbott’s IVD businesses will probably not be the end of GE’s interest in in vitro diagnostics. It is probable that, in the coming months or years, GE will find another attractive IVD company to acquire.
Related Articles:
GE Announces Termination of Contract with Abbott
Abbott Announces Termination of Contract with GE
GE, Abbott end $8 bln deal for diagnostics business
GE, Abbott nix proposed $8B deal
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Jul 11, 2007 | Laboratory News, News From Dark Daily
Remember Steve Case, the founder of AOL? He’s back and wants to again redefine the Internet by launching a new healthcare website—RevolutionHealth.com. Case is wagering that consumers will willing pay almost $100 per year to subscribe to premium services such as digital medical record (DMR) storage, help with insurance claims, and telephone services designed to provide health coaching and doctor matching.
Case’s main competitor, WebMDU seems to be reacting to the new competition. Recently it revamped its site and converted many of its fee-based services into free services for its visitors. WebMD has created a new service on its Web site: storage and maintenance of health records, which it will offer to consumers for free. WebMD is profitable primarily because of its advertising revenue—tapping into the huge advertising budget of pharmaceutical companies—rather than making money from subscription fees paid by consumers using its Web site and services.
Case predicts RevolutionHealth.com will be profitable because of the growing push towards consumer-driven health plans (CDHPs). Dark Daily has noted before that people are becoming increasingly interested in their own healthcare, researching their conditions and physicians online and elsewhere.
RevolutionHealth.com will entice people to try paid services by offering a free trial. Users who sign up for RevolutionHealth.com in the site’s first 90 days will get free telephone consulting and free digital record services for one year. That promotion is going on right now, so sign up for a free account and try it out if you’re intrigued!
It is questionable whether RevolutionHealth.com can become profitable in an age where people can easily access many Web-based services free-of-charge. The company may have to adjust its model in the long-term and rely more on advertising, as its competitors already do.
Clinical laboratories and pathology group practices are likely to benefit from all the promotion and consumer education that will accompany the launch of RevolutionHealth.com. Steve Case will be spending liberally to attract consumer attention to his new e-business. He needs for consumers to find it easy to access healthcare information and services using the Internet. As more consumers grow comfortable going to the Web for these purposes, they will begin to look around for the Web sites of their physician and their laboratory. That is why enterprising laboratories may want to enhance their Web sites to provide highly personalized consumer information.
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