Quest Diagnostics' ($DGX) ongoing restructuring efforts took a new twist this week. The company disclosed on the last day of 2012 that it had sold most of its OralDNA lab salivary diagnostics business, in order to refocus its energies on diagnostics information services for physicians and hospitals.
Access Genetics is the lucky buyer, though neither side disclosed any of the juicy financial details. Access, according to its website, is based in Eden Prairie, MN, and offers web-based software, lab materials and molecular diagnostic professional services for medical laboratories.
The sale is a good fit for Access because the company has already offered support and expertise for the test for dental professional clients going back to 2008, according to the announcement. So there won't be huge adjustments to incorporate the business line more closely into its own offerings.
Quest (maybe because of the holidays), didn't say much about the sale, other than that it was part of the company's grand plan "to refocus its resources on its core diagnostic information services business."
That process has already included a number of changes, including new managers, a simpler organizational structure, and layoffs of up to 600 employees in order to save $65 million by the end of 2013, and reduce total expenses by about $500 million. Reinforcing the need for a new strategy, Quest saw its 2012 third-quarter revenue drop more than 5% and has lowered its annual revenue projections twice. The company faces pricing pressures and a demand decline for diagnostic assays.
- read the release
Quest lowers outlook after Q3 profit drop
Quest Diagnostics slashing 400-600 jobs to save $65M
Slow market stunts growth of Quest, LabCorp