Quest Diagnostics ($DGX) is still slimming down to cut its losses, now selling its HemoCue business to Danaher's ($DHR) Radiometer Medical unit for $300 million.
The diagnostics giant announced its plan to sell off the unit back in January, part of its overall strategy to minimize its presence in the point-of-care diagnostics product business and focus on information services. Quest will use the $300 million to repurchase shares through its stock buyback program, CEO Steve Rusckowski said.
The HemoCue sale comes on the heels of Quest's December divestiture from OralDNA, the lab salivary diagnostics business it sold to Access Genetics for an undisclosed sum. The deals are all part of Quest's efforts to realign its business and reinstate revenue growth. But it's an uphill battle: Last year's $7.4 billion in revenue was essentially unchanged from 2011, and the company is projecting just 0% to 1% growth for 2013.
But Quest is being proactive. Under its "Invigorate" plan, announced in the fall, the company is cutting up to 600 jobs, changing managerial structure and reorganizing its business units, aiming to save $500 million this year. Quest is now divided into two divisions, Diagnostics Solutions and Diagnostic Information Services, and the company is counting on the latter to bring in the lion's share of revenue, especially now that Quest is without the OralDNA and HemoCue businesses.
Quest expects the HemoCue deal to close next month, and the company reported an $89.5 million charge in the fourth quarter that covers both sales.
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