NEW YORK (360Dx) – Quest Diagnostics' Summit Health wellness subsidiary has agreed to acquire substantially all of the assets of workplace wellness company Hooper Holmes, doing business as Provant Health.
The Quest asset purchase agreement is valued at $27 million and takes the form of a "stalking horse" bid, meaning the bid has been entered prior to a bankruptcy auction, and the sale would be completed after the auction process is carried out under the terms of section 363 of the bankruptcy code.
In conjunction with the purchase agreement, Provant Health petitioned for Chapter 11 bankruptcy protection on Monday, Aug. 27, to facilitate a rapid bankruptcy sale process. To meet working capital requirements during the sale process, Provant Health has signed definitive agreements with its two primary lenders, SWK Holdings and CNH Finance, to provide up to $13.6 million to allow the company to continue to operate through closing of the sale. The transaction is expected to close in October, after review and approval by the bankruptcy court.
The Quest asset purchase agreement also contains a transition services agreement through Dec. 31, to ensure smooth client transition and seamless continued operations.
The merger of Hooper Holmes and Provant Health in 2017 left the combined company with a working capital shortfall and an over-leveraged balance sheet, resulting in significant losses in 2017, according to Jim Fleet, chief restructuring officer and senior executive in charge of Provant Health.
Provant Health's national network of health professionals provides laboratory testing, risk assessment, and sample collection services to wellness and disease management companies, employers and brokers, government organizations, and academic institutions.
Summit Health, acquired by Quest in 2014, offers private-label services that health plans and health improvement companies can resell to employers and other clients. Quest's services in the space include Blueprint for Wellness, which Quest and other large employers offer to employees to help identify health risks through lab testing and biometric measures.
"We believe that the purchase of Provant Health by Quest will extend greater value to our customers and partners than ever before," Provant Health President Mark Clermont said.
Quest's aim for the transaction is to broaden access to diagnostic innovation, particularly in the employer wellness space, according to Wendy Bost, senior director of corporate communications for Quest.