Quest Diagnostics Announces $1.85B Offering

By Tamara Parker • Tuesday, August 20 07:57 • Permanent Link

Quest Diagnostics, a leader in diagnostic information services, has announced the pricing of a public offering of senior notes, totaling $1.85 billion. The offering includes $400 million aggregate principal amount of 4.600% senior notes due 2027, $600 million aggregate principal amount of 4.625% senior notes due 2029, and $850 million aggregate principal amount of 5.000% senior notes due 2034.

The net offering proceeds are expected to be received upon closing on August 19, 2024. The company intends to use the proceeds to fund the purchase price and related transaction costs of the previously announced acquisition of LifeLabs, Inc. and related entities, as well as for general corporate purposes.

Notably, the 2027 notes and the 2029 notes will be subject to a special mandatory redemption at a price equal to 101% of the aggregate principal amount of such series plus accrued and unpaid interest to the redemption date if the LifeLabs acquisition is not consummated. However, the 2034 notes are not subject to the special mandatory redemption.

In the event the company is required to redeem the 2027 notes and the 2029 notes, the net proceeds from the offering of the 2034 notes will be used for general corporate purposes, which may include the redemption or repayment of existing senior notes, and to fund a portion of the payment resulting from the special mandatory redemption of the 2027 notes and the 2029 notes.

As of the press release, Quest Diagnostics annually serves one in three adult Americans and half the physicians and hospitals in the United States, with nearly 50,000 employees.

This announcement comes as the company seeks to bolster its financial position and undertake strategic initiatives, particularly the acquisition of LifeLabs, Inc. The move reflects the company's commitment to leveraging diagnostic insights to improve healthcare outcomes and create a healthier world. As a result of these announcements, the company's shares have moved -0.2% on the market, and are now trading at a price of $151.12. For the full picture, make sure to review Quest Diagnostics's 8-K report.

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