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LabCorp to Buy Pathology Associates Medical Laboratories

NEW YORK (360Dx) – Laboratory Corporation of America said after the close of the market Thursday that it is has reached a definitive agreement to acquire all ownership interest in Pathology Associates Medical Laboratories, which is jointly owned by Providence Health & Services and Catholic Health Initiatives.

LabCorp also is acquiring PAML's interest in the joint ventures Colorado Laboratory Services; Kentucky Laboratory Services; MountainStar Clinical Laboratories; PACLAB Network Laboratories; and Tri-Cities Laboratory.

PAML is headquartered in Spokane, Washington and its joint ventures provide laboratory services in California, Colorado, Idaho, Kentucky, Montana, Oregon, Utah, and Washington. The deal, LabCorp said, expands its geographic scope in the Pacific Northwest, Midwest, and South. LabCorp already provides services to several Swedish Medical Center facilities in Seattle, a partner within the Providence system.

LabCorp said that the hospital co-owners of CLS, KLS, and PACLAB have agreed to sell their joint venture interests to LabCorp.

The hospital partners in MSCL and TCL continue to evaluate their future options for ownership in the joint venture, including potentially a sale to LabCorp, it said, adding the hospital co-owner of Alpha Medical Laboratory, a PAML-affiliated joint venture, intends to buy PAML's interest in Alpha. Upon board approval, it will sell the joint venture to LabCorp.

Upon completion of the deals, Providence, Catholic Health Initiatives, and the hospital joint venture owners will continue providing all existing in-patient hospital laboratory services, while LabCorp will provide outreach testing services and reference laboratory services currently provided by PAML and the joint ventures that are part of the transactions.

The deals do not include any PAML joint ventures services in California, LabCorp said.

Financial and other terms of the transactions were not disclosed.

LabCorp Chairman and CEO David King said in a statement that the deal "strengthens LabCorp's relationships with anchor health systems and expands LabCorp's geographic presence into important markets."

The deal is LabCorp's second acquisition of a hospital-based laboratory since the start of 2017. In January, the firm bought the assets of Mount Sinai's Clinical Outreach Laboratories.