Solstas Labs' Select Dx Buy May Re-Ignite Speculation of LabCorp Takeover

By Kirell Lakhman

Solstas Lab Partners has acquired clinical lab Select Diagnostics in a bid to broaden its footprint on the East Coast, a deal that is very likely to jump-start speculation that the combined lab could become a takeover target by Quest or LabCorp.

“As in all of our acquisitions, we look for cultural fit and quality of personnel, in addition to the opportunity to grow our business and brand,” Solstas CEO David Weavil said in a statement.

solstas.jpegSelect and Solstas are both based in Greensboro, NC, and Select also has offices in Raleigh, NC, and Lexington, Va.

The deal comes one week after Solstas, formerly known as Carilion-Spectrum, closed a private-equity investment for an undisclosed sum with Ascension Health Ventures, which presumably helped finance the Select buy.

The Select acquisition is expected to expand Solstas' ranks to nearly 3,700.

Founded in 1991, Solstas has grown rapidly through acquisitions. Indeed, it is itself a product of Carilion Labs' March 2010 merger of Spectrum Laboratory Network, which created Carilion-Spectrum. It is now a Solstas "lab partner."

That deal rapidly fueled speculation that Carilion-Spectrum would become a takeover target by Quest or LabCorp. LabCorp is the likelier choice: Select was created by Ernie Knesel, a LabCorp co-founder, and both Select and Solstas are located in LabCorp's backyard in nearby Burlington.

At the time of its merger, Carilion-Spectrum served 37 hospitals and 14,000 physicians in eight mid-Atlantic states, making one of the top-10 lab companies in the country in terms of size.

Six months later, in September 2010, it acquired Valdosta, Ga.-based Doctors Laboratory, which was expected to help Carilion-Spectrum generate $350 million in annual revenue and employ more than 3,200 people.

Carilion-Spectrum changed its name to Solstas in February.

Solstas said that with Select onboard the combined lab will employ nearly 3,700 people to provide testing services to hospitals and other healthcare facilities in a nine-state footprint that stretches from the Northeast to the South.

Financial terms of the acquisition were not disclosed.


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