MedPlus, Inc.(R) Enters Merger Discussions

Apr 02, 2001, 01:00 ET from MedPlus, Inc.

    CINCINNATI, April 2 /PRNewswire/ -- MedPlus, Inc.(R) (Nasdaq:   MEDP)
 announced today that its board of directors has authorized management to enter
 discussions to be acquired by Quest Diagnostics Incorporated (NYSE:   DGX). This
 action was taken by the board of directors after concluding that the current
 operating performance of the Company, coupled with the recent and continued
 downturn in the capital markets, have adversely affected the Company's ability
 to raise the debt or equity financing necessary to fund the Company's ongoing
 operations.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/19990901/MEDPLUSLOGO )
     As discussed in its third quarter report on Form 10-QSB, the Company has
 experienced a history of significant operating losses and negative cash flow
 from operations, which has necessitated periodic private equity offerings,
 asset sales and secured lending arrangements. Also as disclosed, the Company
 needs to supplement its existing equity line of credit with bank or other
 financing sources to achieve its current operating plan.
     As discussed below, management has pursued and received proposals to
 secure debt and/or equity financing. In addition, Quest Diagnostics, which
 owns approximately 18% of MedPlus' outstanding voting stock, has proposed to
 acquire 8,630,000 shares of preferred and common stock at $2.00 per share in
 cash. The Company's board of directors has granted Quest Diagnostics exclusive
 rights for a seven day period to negotiate a definitive agreement to acquire
 all outstanding shares of MedPlus not currently owned by Quest Diagnostics.
 This proposed transaction, if consummated, will permit the Company to continue
 to meet its current and anticipated financial obligations.
     "Management and the board of directors of the Company have spent a
 significant amount of time pursuing alternative financing strategies over the
 past six months," said Richard A. Mahoney, Chief Executive Officer of MedPlus.
 "Given the current condition of the debt and equity markets and the extremely
 depressed valuations of e-Health companies during the past year, it has been
 exceptionally difficult to attract potential lenders or investors to our
 company. These facts have significantly impaired our ability to secure a
 suitable long-term lending arrangement or favorable equity financing. In
 addition, our recent share price and the lack of significant daily trading
 volume have dramatically limited the amount of funding available to the
 Company under the formula provided in our equity line of credit agreement
 executed in December 2000."
     Mahoney continued, "Our board of directors has concluded that the proposed
 offer from Quest Diagnostics is in the best interest of our shareholders,
 customers and employees. Other alternatives considered would have provided
 insufficient long-term funding, very unfavorable dilution to common and
 preferred shareholders and significant guaranteed rates of return on newly
 invested funds. The Company's current financial condition and our commitments
 to our customers mandate that we finalize the Quest Diagnostics proposal or a
 similar arrangement in the immediate future."
     Quest Diagnostics' proposal is contingent upon a number of factors
 including the execution of a definitive purchase agreement, a favorable
 independent fairness opinion, approval by both companies boards of directors
 and an affirmative vote by MedPlus shareholders. If a definitive agreement is
 executed, Quest Diagnostics will provide MedPlus with a secured line of credit
 arrangement of up to $5,000,000 until the acquisition is consummated.
 
     About MedPlus
     MedPlus is a leading developer and integrator of clinical connectivity and
 data management solutions for healthcare organizations and clinicians. These
 solutions efficiently and securely collect, store, manage and retrieve
 clinical information within an organization, enterprise or community via
 virtual private networks and/or the Internet. MedPlus' solutions have been
 implemented in more than 125 hospitals throughout North America. For more
 information, visit the Company's Web site at www.medplus.com .
     MedPlus notes that many of the statements made herein are forward-looking
 statements. As such, factors may occur which could cause actual events to
 differ materially from those anticipated in these statements. For example, if
 Quest Diagnostics and the Company do not execute a definitive purchase
 agreement in the immediate future, and if the Company does not receive a
 favorable fairness opinion, the proposed acquisition of the Company and the
 provision of the secured line of credit may not occur. In that event, the
 Company would have to immediately reinitiate its pursuit of alternative
 financing in an effort to meet its current financial obligations. However,
 there is no assurance that such financing would be available or that it could
 be obtained prior to the depletion of remaining cash balances. In the event
 that required financing could not be obtained, the Company may be unable to
 continue as a going concern.
 
 

SOURCE MedPlus, Inc.
    CINCINNATI, April 2 /PRNewswire/ -- MedPlus, Inc.(R) (Nasdaq:   MEDP)
 announced today that its board of directors has authorized management to enter
 discussions to be acquired by Quest Diagnostics Incorporated (NYSE:   DGX). This
 action was taken by the board of directors after concluding that the current
 operating performance of the Company, coupled with the recent and continued
 downturn in the capital markets, have adversely affected the Company's ability
 to raise the debt or equity financing necessary to fund the Company's ongoing
 operations.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/19990901/MEDPLUSLOGO )
     As discussed in its third quarter report on Form 10-QSB, the Company has
 experienced a history of significant operating losses and negative cash flow
 from operations, which has necessitated periodic private equity offerings,
 asset sales and secured lending arrangements. Also as disclosed, the Company
 needs to supplement its existing equity line of credit with bank or other
 financing sources to achieve its current operating plan.
     As discussed below, management has pursued and received proposals to
 secure debt and/or equity financing. In addition, Quest Diagnostics, which
 owns approximately 18% of MedPlus' outstanding voting stock, has proposed to
 acquire 8,630,000 shares of preferred and common stock at $2.00 per share in
 cash. The Company's board of directors has granted Quest Diagnostics exclusive
 rights for a seven day period to negotiate a definitive agreement to acquire
 all outstanding shares of MedPlus not currently owned by Quest Diagnostics.
 This proposed transaction, if consummated, will permit the Company to continue
 to meet its current and anticipated financial obligations.
     "Management and the board of directors of the Company have spent a
 significant amount of time pursuing alternative financing strategies over the
 past six months," said Richard A. Mahoney, Chief Executive Officer of MedPlus.
 "Given the current condition of the debt and equity markets and the extremely
 depressed valuations of e-Health companies during the past year, it has been
 exceptionally difficult to attract potential lenders or investors to our
 company. These facts have significantly impaired our ability to secure a
 suitable long-term lending arrangement or favorable equity financing. In
 addition, our recent share price and the lack of significant daily trading
 volume have dramatically limited the amount of funding available to the
 Company under the formula provided in our equity line of credit agreement
 executed in December 2000."
     Mahoney continued, "Our board of directors has concluded that the proposed
 offer from Quest Diagnostics is in the best interest of our shareholders,
 customers and employees. Other alternatives considered would have provided
 insufficient long-term funding, very unfavorable dilution to common and
 preferred shareholders and significant guaranteed rates of return on newly
 invested funds. The Company's current financial condition and our commitments
 to our customers mandate that we finalize the Quest Diagnostics proposal or a
 similar arrangement in the immediate future."
     Quest Diagnostics' proposal is contingent upon a number of factors
 including the execution of a definitive purchase agreement, a favorable
 independent fairness opinion, approval by both companies boards of directors
 and an affirmative vote by MedPlus shareholders. If a definitive agreement is
 executed, Quest Diagnostics will provide MedPlus with a secured line of credit
 arrangement of up to $5,000,000 until the acquisition is consummated.
 
     About MedPlus
     MedPlus is a leading developer and integrator of clinical connectivity and
 data management solutions for healthcare organizations and clinicians. These
 solutions efficiently and securely collect, store, manage and retrieve
 clinical information within an organization, enterprise or community via
 virtual private networks and/or the Internet. MedPlus' solutions have been
 implemented in more than 125 hospitals throughout North America. For more
 information, visit the Company's Web site at www.medplus.com .
     MedPlus notes that many of the statements made herein are forward-looking
 statements. As such, factors may occur which could cause actual events to
 differ materially from those anticipated in these statements. For example, if
 Quest Diagnostics and the Company do not execute a definitive purchase
 agreement in the immediate future, and if the Company does not receive a
 favorable fairness opinion, the proposed acquisition of the Company and the
 provision of the secured line of credit may not occur. In that event, the
 Company would have to immediately reinitiate its pursuit of alternative
 financing in an effort to meet its current financial obligations. However,
 there is no assurance that such financing would be available or that it could
 be obtained prior to the depletion of remaining cash balances. In the event
 that required financing could not be obtained, the Company may be unable to
 continue as a going concern.
 
 SOURCE  MedPlus, Inc.