Tech-2557: Fast-Growing Clinical Lab in TX For Sale

Many Insurance Contracts – Sustainable Growth – Small Covid Revenue – Well-paying Novitas MAC

The Laboratory was started in 2016 by two partners as an LLC in desirable Novitas MAC of Texas and offers an array of clinical test panels. It is CLIA and COLA certified and is in-network with several commercial payors like BCBS of TX, AZ, and IL, Medicare, and several Medicaids, including almost impossible to get into Medicaids such as Driscoll and Superior HealhPlan. The Lab offers 18 tests, including Toxicology, Infectious Disease Testing, and Genetic Testing, to physicians all over the country. Its test menu provides physicians access to innovative lab tests that assist them in treating their patients promptly. The Lab’s reports include easy-to-read summaries with rule-based logic to show detected/non-detected medications and patient testing history. Customer Service has been a critical ingredient in their success. Thus, physicians using the Lab can access Lab’s clinical staff and Medical Director to help assist with any questions the physicians may have.  The Lab is profitable, and the owners are looking for a buyer who can continue the Lab’s growth trajectory.

Even as the owners have put this laboratory for sale, they are continuing to grow the Lab and are open to assisting the new owner in helping grow the Lab.

While the Lab offers Covid testing, it never had a huge volume of Covid testing. Its current volume of Covid testing is from referring clinics. It is the type of sustained volume that one would expect to see in laboratories because when the patient is sick, the physicians often want to rule out Covid.

Great Opportunity for Financial and Strategic Buyers

It takes years to acquire some of the Payor Contracts this Lab has. And this includes some of the important ones for the Texas market, such as Driscoll and Superior Health – these two are very important for the TX market and are nearly impossible to get. So a buyer getting into the Lab Market will find a turn-key fast-growing lab with a great potential to grow more by growing geographically and offering more tests.

A strategic buyer who can bring more volume will find the existing payor contracts beneficial. They will allow the buyer to run and bill more tests in-house. If the strategic buyer is a Laboratory with additional complementary payor contracts, it will be even more beneficial.

The owners have put this Lab for sale because they have multiple medical businesses, all of which are taking a lot of their time. One of the owners can stay for some time for a smooth transition. And with the right partner, they can also help in business development.

Financial Highlights

Revenue: $5.7M (2022 – projected from 8 months); $8.2M (2023 projection). 2023 revenue growth is projected based on new referral relationships established in the last quarter of 2022, which will bring significantly more volume in 2023, largely based on Lab’s favorable payor contracts.
EBITDA: $700K (2022 – projected from 8 months); $1M+ (2023 projection)
Price: $5M and a discounted percentage of collectible AR (estimated at over $3M). Seller will accept some earnout which will be tied to the Lab achieving $1M+ EBITDA in 2023.

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analytical lab