Dive Brief:
- Quest Diagnostics has struck a deal to buy kidney disease laboratory testing service assets from Fresenius Medical Care, the companies said Monday.
- The acquisition will add dialysis-related water testing to Quest’s portfolio. Quest will perform the tests and other end-stage kidney disease laboratory services for Fresenius Medical Care’s dialysis centers in the U.S.
- Quest, which has not disclosed the value of takeover, completed eight buyouts last year, but CEO Jim Davis recently told investors the company would “moderate” its dealmaking pace in 2025.
Dive Insight:
The takeover covers select assets of Fresenius Medical Care wholly owned Spectra Laboratories. Spectra, which Fresenius Medical Care acquired in 1997, offers kidney-specific laboratory testing services in the U.S.
Quest will integrate some of Spectra’s capabilities into its service offering. Fresenius Medical Care said the arrangement will unlock operational efficiencies and enable its centers to benefit from Quest’s scale.
Quest laboratories across the U.S. will provide tests, cutting transport time and the wait for some results. Quest expects to optimize its return on investment by performing tests during quieter daytime hours.
The companies expect to close the takeover in the second half of 2025 and complete the transition of services by early 2026. Quest is currently integrating multiple takeovers after a year in which it closed eight acquisitions, including the 1.35 billion Canadian dollar (about $985 million) buyout of Canadian laboratory business Lifelabs.
Acquisitions are a key growth driver for Quest. However, the focus in 2025 is on “driving growth from productivity from transactions completed last year,” Davis said on an earnings call last month. The pace of dealmaking will moderate this year, the CEO said, but “we're not going to be shy about picking things up and going after things that improve our market access.”
Fresenius Medical Care invested in Spectra in the years after buying the laboratory business, breaking ground on a 200,000-square-foot facility in 2019. Yet, Spectra was part of Fresenius Medical Care’s recent evaluation of its portfolio.
The review led Fresenius Medical Care to exit all Latin American countries, Sub-Saharan Africa and Turkey, while also divesting Cura Day Hospitals Group in Australia and select assets of Spectra. Last year, those actions saw Fresenius Medical Care divest 230 facilities, 8,200 employees and around 33,800 dialysis patients.
