SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Laboratory Corporation of America Holdings
-----------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1/
--------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------
1/ Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ]Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
-------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------------
3) Filing Party:
---------------------------------------------------------------------------
4) Date Filed:
---------------------------------------------------------------------------
Notes:
------------------------------------------------------------------------
This information contains forward-looking statements which are
subject to change based on various important factors, including
without limitation, competitive actions in the marketplace and
adverse actions of governmental and other third-party payors. Actual
results could differ materially from those suggested by these forward-
looking statements. Further information on potential factors that
could affect the Company's financial results is included in the
Company's Form 10-K for the year ended December 31, 2001 and subsequent
filings.
DIANON Systems, Inc. will file a proxy statement and DIANON and Laboratory
Corporation of America-Registered Trademark- Holdings (LabCorp-Registered
Trademark-) will file other relevant documents with the SEC concerning the
proposed merger of a wholly-owned subsidiary of LabCorp with and into DIANON.
INVESTORS ARE URGED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE AND
ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. You will be able to obtain the documents free of charge
at the website maintained by the SEC at www.sec.gov. In addition, you may
obtain documents filed with the SEC by LabCorp free of charge by requesting them
in writing from LabCorp at 430 South Spring Street, 1st Floor, Burlington, North
Carolina 27215, Attention: Investor Relations, or by telephone at
(336) 229-1127. You may obtain documents filed with the SEC by DIANON free of
charge by requesting them in writing from DIANON, 200 Watson Boulevard,
Statford, Connecticut 06615, Attention: Secretary, or by telephone at
(203) 381-4055.
LabCorp and DIANON, and their respective directors and executive officers may be
deemed to be participants in the solicitation of proxies from the stockholders
of DIANON in connection with the merger. Information about the directors and
executive officers of LabCorp and their ownership of LabCorp shares is set forth
in the proxy statement for LabCorp's 2001 annual meeting of shareholders filed
with the SEC on April 15, 2002. Information about the directors and executive
officers of DIANON and their ownership of DIANON stock is set forth in the proxy
statement for DIANON's 2002 annual meeting of stockholders filed with the SEC
on July 1, 2002. Investors may obtain additional information regarding the
interests of such participants by reading the proxy statement when it becomes
available.
KEY TRANSACTION FACTS:
----------------------
Purchase Price - $47.50 per share - 100% cash
Equity Value - Approximately $598 million
Enterprise Value - Approximately $544 million
EPS Accretive - 2003 = $0.05
EBITDA Multiple - 11.5x 2003 EBITDA without synergies
(2003) - 6.6x with peak synergies ($35 million
in 2005)
Conditions - Regulatory approval
- DIANON shareholder approval
Closing - Q1 2003
DIANON TRANSACTION SPECIFICS
------------------------------
Financing structure and assumptions:
- Bridge loan - $350 million
- Borrowings under existing revolver -
approximately $210 million
- Available Cash - $38 million
PROFILE OF DIANON:
--------------------
- A leading provider of anatomic pathology and oncology
testing services in the U.S., with a focus on the outpatient
market
1) Serves approximately 14,500 of the 50,000 oncology, urology,
dermatology, gynecology and gastroenterology specialists
in the U.S.
2) Directly employs 48 pathologists
3) Processes 8,000 tissue samples daily
4) Serves more than 650 managed care organizations, including
Aetna, UnitedHealthcare and Oxford
- Offers clinical chemistry and gene-based testing services in
support of cancer services
- Innovative, proprietary health information reporting system
(CarePath-Trademark-)
MAP OF DIANON LAB LOCATIONS
-----------------------------
Main Testing Facility - Stratford, CT
Regional Labs - New City, NY, Woodbury, NY, Tampa, FL, Plano, TX,
Oklahoma City, OK
Specimen Processing Center - Wilmington, OH
STRATEGIC RATIONALE
-------------------
- LabCorp has identified cancer testing as its most important growth
opportunity over the next 3-5 years
- Diagnostic testing for cancer is expected to increase substantially -
DIANON complements LabCorp's capabilities in anatomic and gene-based
testing
- DIANON's broad testing menu (anatomic and esoteric) is supported by
its strong scientific expertise, outstanding sales capabilities and
innovative, proprietary reporting format, CarePath-Trademark-
- LabCorp's genomic and esoteric testing can be offered through DIANON,
expanding access to these tests
- LabCorp's strategic cancer partnerships will be enhanced by DIANON's
sales and marketing efforts to DIANON's more than 14,500 physician
customers
1) Myriad Genetics (predisposition assays for breast, ovarian cancer)
2) EXACT Sciences (colorectal cancer)
3) Celera Diagnostics (prostate cancer)
4) Correlogic (ovarian cancer)
OPERATIONAL RATIONALE
---------------------
- DIANON has strong brand recognition
1) CarePath-Trademark- reporting format is highly regarded in the industry
2) CarePath-Trademark- will become LabCorp's primary pathology
reporting format
- DIANON's solid EBITDA margins can be enhanced through supply savings
and operational efficiencies
- Provides additional anatomic pathology and cytology capacity
- Sophisticated sales organization to offer LabCorp's existing
cancer testing menu
FINANCIAL IMPACT OF TRANSACTION
-------------------------------
- Expected incremental revenue:
- 2003 - $210 million
- Expected incremental EBITDA:
(including synergies)
- 2003 - $55 million
- Expected incremental diluted EPS
- 2003 - $0.05
Notes:
Assumes transaction close date of 1/1/03
SYNERGY EXPECTATION:
-------------------
Synergy commitment - $35 million
Timing:
- 2003 - $7.5 million
- 2004 - $25 million
- 2005 - $35 million
Sources:
- Logistics
- Supply Savings
- Infrastructure Improvements
SYNERGY PLAN:
-------------
- Reduce supply costs
- Reduce logistics expenses
- Reduce overlapping personnel
- Eliminate redundant facilities and overhead