In an effort to expand its network, Quest Diagnostics (NYSE: DGX) has announced a deal with not-for-profit Mercy, a multi-state healthcare system. Quest is acquiring the health system’s outreach laboratory services business, which currently operates from 29 hospital laboratories and two independent clinic laboratories in Arkansas, Kansas, Missouri and Oklahoma. 

No terms were disclosed in the all-cash transaction, but under the agreement, testing associated with outreach lab services will transition to the Quest Diagnostics full-service laboratory in Lenexa, Kansas, and a network of rapid response laboratories across the region. Mercy will continue to wholly own and operate its hospital labs for tests connected to inpatient and hospital-based outpatient care needs. 

The deal is expected to close in the second quarter of 2021. Cain Brothers was engaged to serve as Mercy’s advisor.

Quest Diagnostics has been working with health systems and hospitals for a while now to boost the reach of its network. In June 2020, the company purchased Mid America Clinical Laboratories (MACL), the largest independent clinical laboratory provider in Indiana. The company was started as a joint venture by Quest Diagnostics, Ascension St. Vincent and Community Health Network. Quest Diagnostics acquired its joint venture partners’ interests in MACL and operates the business by itself. As part of the transaction, Quest also provided professional hospital lab services under long-term service agreements for approximately 30 hospital labs owned and operated by Ascension St. Vincent and Community Health Network.  

Earlier in 2020, Quest Diagnostics broadened its scope in genetics and rare diseases with the January acquisition of Blueprint Genetics, based in Helsinki, Finland. Founded in 2012, Blueprint now serves customers in more than 70 countries.