Shares of

Dianon Systems

(DIAN)

were set for a pop at the open Monday after

Laboratory Corp. of America

(LH) - Get Report

agreed to buy the medical testing provider for $47.50 a share, or about $600 million, in cash.

Dianon's shares were up $6.51, or 16%, to $46.70 on the Instinet premarket session.

Lab Corp., which also provides diagnostic services, said the transaction will add 5 cents a share to its 2003 earnings, and said it expects the acquisition to create cost savings of $35 million annually by 2005.

Dianon had 2001 revenue of about $126 million, and revenue of about $141 million in the nine months ended Sept. 30, 2002.