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Valencia Lab Firm Agrees to Be Sold

Florida's AmeriPath would pay $328 million for money-losing Specialty Laboratories.

October 01, 2005|David Colker | Times Staff Writer

A Florida medical company said Friday that it agreed to buy Specialty Laboratories Inc. in Valencia for about $328 million.

AmeriPath Inc. Chief Executive Donald Steen said that Specialty Laboratories would help "expand our geographic presence" to the West Coast.

Specialty Laboratories, which does clinical testing for doctors treating cancer, heart disease, diabetes and other conditions, was founded 30 years ago by former UCLA medical professor James Peter.

Peter, his family and a trust own about 60% of Specialty. The Peter group would get about $66 million in cash from the sale and a 20% stake in the merged company, Specialty Chairman Richard Whitney said.

Specialty posted a $13-million loss last year on $134.8 million in revenue and has not reported a profit since 2001. Whitney saw the sale as a way out of a difficult financial position.

"The company has struggled to return to profitability," he said. "I think we felt that realistically, it would take us some time to do that."

Under the terms of the deal, privately held AmeriPath will pay $13.25 for each share of Specialty stock.

"It's a very good deal for Specialty shareholders, given that the company has been losing money for the past three years," said analyst Ivan Feinseth of Matrix USA in New York. "It's a slight premium over the current share price, but we placed the intrinsic value of the stock at about $4."

Specialty shares rose 19 cents Friday to $13.23.

Whitney, who won't hold a position in the new company, said the Valencia lab would not be closed and would probably hire additional personnel to handle increased business after the purchase.

The deal is expected to close early next year.

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