SECAUCUS, N.J. - Quest Diagnostics (NYSE: NYSE:DGX), a prominent provider of diagnostic information services, has reached a definitive agreement to acquire select laboratory assets from Allina Health, a non-profit healthcare system. This move aims to expand the accessibility and affordability of advanced laboratory services in Minnesota and western Wisconsin.
The collaboration between Quest and Allina Health is expected to enhance the quality of lab services available to providers and patients in the region. Dominica Tallarico, Chief Operations Officer for Allina Health, expressed confidence in Quest's ability to build on their established foundation of excellence in laboratory services. She also noted that the agreement would enable Allina Health to reinvest in its non-profit mission.
Jim Davis, Chairman, CEO and President of Quest Diagnostics, highlighted the shared commitment between the two organizations to community health. Davis stated that the transaction aligns with Quest's growth strategy, which includes expanding through strategic lab acquisitions. The deal will allow Quest to offer its laboratory services to Allina Health's clinic physicians and outreach provider clients.
The transaction is scheduled to be finalized in the third quarter of 2024, subject to customary regulatory reviews. The financial terms of the agreement have not been disclosed.
Quest Diagnostics is known for its contribution to the healthcare ecosystem by providing diagnostic insights that support improved health outcomes. Annually, the company serves a significant portion of adult Americans and healthcare professionals nationwide.
In other recent news, Quest Diagnostics has been in the spotlight for several noteworthy developments. Citi maintains a neutral rating on the company's stock, predicting potential margin improvements by 2024 and a positive outlook based on high utilization rates. The company's management has also expressed strong confidence in a delay in the Protecting Access to Medicare Act (PAMA), which is seen as a significant variable affecting long-term margins.
Quest Diagnostics has finalized the acquisition of PathAI Diagnostics' laboratory assets, aiming to enhance the use of artificial intelligence (AI) and digital pathology in disease diagnosis. The newly acquired facility in Memphis, now rebranded as AmeriPath, will serve as Quest's hub for AI and digital research and development.
In leadership changes, Robert B. Carter, currently the Executive Vice President and Chief Information Officer at FedEx Corporation (NYSE:FDX), has joined Quest Diagnostics' Board of Directors, and Murali Balakumar has been named Senior Vice President and Chief Information and Digital Officer.
Quest Diagnostics has announced a quarterly cash dividend of $0.75 per share. Additionally, a study conducted by Haystack Oncology, a subsidiary of Quest Diagnostics, suggests that circulating tumor DNA (ctDNA) testing for minimal residual disease could potentially reduce health plan costs by up to 21% for stage II colorectal cancer patients. These are recent developments that highlight Quest Diagnostics' commitment to integrating advanced technologies into its operations, expanding its leadership team, and providing value to its shareholders.
InvestingPro Insights
As Quest Diagnostics (NYSE: DGX) continues to execute its growth strategy through acquisitions like the recent agreement with Allina Health, the company's financial health and market performance remain critical for investors monitoring the deal's potential impact. According to InvestingPro data, Quest Diagnostics boasts a market capitalization of $15.39 billion, underscoring its significant presence in the diagnostics sector.
InvestingPro Tips indicate that management's confidence in the company's trajectory is evident through their aggressive share buyback strategy. Additionally, the company's commitment to returning value to shareholders is highlighted by its impressive track record of raising its dividend for 12 consecutive years, a testament to its financial stability and investor-friendly approach.
Despite a slight revenue decline of 3.29% over the last twelve months as of Q1 2024, Quest Diagnostics maintains a strong gross profit margin of 33.08%, indicating effective cost management and an ability to sustain profitability. Moreover, with a P/E ratio of 18.37, the company is trading at a valuation that reflects investor expectations for continued earnings strength.
For investors seeking more in-depth analysis and additional InvestingPro Tips for Quest Diagnostics, consider exploring the full suite of insights available at Investing.com/pro/DGX. There, you will find a comprehensive list of tips to guide your investment decisions. Remember to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering you even more value as you navigate the investment landscape.
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