UMass Memorial seeks 19% stake in Quest subsidiary
(UPDATED at 11:40 a.m. Thursday) UMass Memorial Medical Center is seeking a minority stake in a subsidiary of the company that bought its clinical outreach laboratory business in 2012, according to documents filed by both organizations with the Massachusetts Health Policy Commission.
The documents, filed May 1, said the medical center wants to purchase an 18.9-percent share of the subsidiary, Quest Diagnostics Massachusetts LLC. That would allow it to nominate one of five directors of the subsidiary, according to the filings with the commission, which must sign off on the proposal. A statement from UMass Memorial said the organization expects the transaction to be completed this summer.
“This is a sound economic opportunity that will strengthen the medical center’s ability to invest in areas that support our mission to improve the health of our community,” UMass Memorial spokesman Anthony Berry said in the statement.
The Quest subsidiary conducts “substantially all” of the clinical diagnostics testing for the hospital, the document filed by UMass Memorial said.
In late 2012, Quest, based in New Jersey, bought the UMass Memorial lab business and its anatomic pathology outreach laboratory division. The Quest division is based in Marlborough in the former Hewlett Packard complex.
Under that agreement, UMass secured the option to invest in a minority stake in the business once the Marlborough lab was built. It was completed last year.
At the time the deal was announced, UMass Memorial Health Care, the medical center’s parent organization, said a big reason behind the decision was the difficulty UMass faced in competing with private lab services, according to then-CEO John O’Brien.
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