Quest Diagnostics’ Acquisition of Memorial Hermann Diagnostic Laboratories

Dechert advised Quest Diagnostics in the transaction.

Quest Diagnostics executed the acquisition of select assets which constitute substantially all the operations of Memorial Hermann Diagnostic Laboratories, the outreach laboratory division of Memorial Hermann Health System.

The acquisition includes nearly 30 MHDL patient service centers and nearly 60 in-office laboratory service sites. These services will transition to the Quest Diagnostics full-service laboratory in Houston. Upon closing, Quest will also provide professional laboratory management services through a multi-year agreement for all of Memorial Hermann’s 21 hospital laboratories, which provide onsite rapid response testing. Memorial Hermann will continue to wholly own these labs.

In addition, Quest will become the sole preferred provider of laboratory services for the Memorial Hermann Health Plan, upon closing. The parties expect to complete the transaction in the second quarter of 2020, assuming customary regulatory approvals are granted. Details of the transaction were not disclosed.

The relationship between Memorial Hermann and Quest is designed to improve access to innovative, quality, and cost-efficient diagnostic services for patients in Texas, particularly the Houston metropolitan area. Assuming the transaction’s completion, physicians and patients will benefit from access to Quest’s industry-leading test menu and broad health plan coverage along with an expanded network of nearly 80 patient services centers throughout Houston.

Quest Diagnostics (NYSE: DGX) is the leading provider of diagnostic information services. Quest Diagnostics offers esoteric, routine medical, drugs of abuse, and non-hospital-based anatomic pathology testing services.

The Dechert team included Corporate Partner Michael Darby (Philadelphia; Picture), who led the team, Associate Marie Mast (Philadelphia), Associate Erin O’Gurek (Philadelphia); Tax Partner Joshua Milgrim (New York), Associate Andy Lau (Philadelphia); Employee Benefits and Executive Compensation Partner David Jones (Philadelphia), Associate Ellie Kang (New York); Labor and Employment Counsel Ian Downes (Philadelphia); Environmental Partner Abbi Cohen (Philadelphia); Real Estate Special Counsel Francois Quintard-Morenas (New York).

Involved fees earner: Abbi Cohen – Dechert; Michael Darby – Dechert; Ian Downes – Dechert; David Jones – Dechert; Ellie Kang – Dechert; Andy Lau – Dechert; Marie Mast – Dechert; Joshua Milgrim – Dechert; Erin O’Gurek – Dechert; Francois Quintard-Morenas – Dechert;

Law Firms: Dechert;

Clients: Quest Diagnostics;

Author: Ambrogio Visconti