Tech-2564: Clinical Laboratory in Midwest For Sale – Unique Revenue Model

Payor and Auto Accident Revenues – Toxicology and Molecular Assays – Consistent and Exceptional Margins


This Lab is a consistently profitable lab with very high EBITDA margins. This Lab was started in June 2018 in the Midwest by three partners. This CAP, COLA, and CLIA accredited Lab provides a full range of PCR testing such as RPP, STI, UTI, Covid 19, women’s health, nail fungus, GI, etc. It also does confirmation and screening toxicology tests of urine. The Lab built its reputation by providing state-of-the-art toxicology testing for auto accident and personal injury cases on time and its client-centered customer service.

Although payments for auto accidents and personal injury cases can take time, they also pay significantly higher (a few thousand dollars for a urine confirmatory study versus a few hundred dollars for the usual cases covered by the insurances). As the collections from auto injuries can sometimes take a year or more, the owners have an arrangement with a funding company who pays them an 18% payment immediately on the auto accident cases. This keeps their cash-flow healthy. Because of this, the AR of the Lab is substantial at over $18M (about 60%-70% collectible). But because of the high payments of the auto accident cases, their EBITDA margins and profits are extremely high.

This modern Lab sits in a stand-alone professional medical building. The managing partner is now ready to retire; hence, the Lab is in the market.

Financial Highlights

In 2021, the lab’s revenue was $3.5M, and its EBITDA was $1.4M. The current year (2022) is also showing a similarly strong year. The table below summarizes the past three years’ and YTD financials for 2022.

 

  (All figures are in US $)

FY 2022

Projected

YTD 2022

(Jan – May)

FY 2021 FY 2020 FY 2019    
  Gross Revenue  3.38M  1.41M  3.50M 2.80M 3.70M    
  % Growth -3.4%   24.8% -24.1%      
  Gross Profit    1.01M  2.33M  1.77M  3.33M    
  % of Total Revenue   71.6% 66.6% 63.2% 90.0%    
  Adjusted EBITDA  1.43M  596K  $1.36M  945K  2.19M  
  % of Total Revenue 42.3% 42.3% 38.8% 33.7% 59.3%    

ASKING PRICE

The asking price for this Lab is $6.5M for the Lab plus discounted price for collectible AR. Currently, AR is at about $18M, and about 60%-70% ( $10.8M – $12.6M) is collectible. The AR may take about 2-3 years to be fully realized”

 OPPORTUNITY HIGHLIGHTS 

  • – Consistent revenues and profits and very high EBITDA margins
  • – Unique Model of blending revenues from payors and from auto cases to achieve high margins
  • – Opportunity to implement and scale this lucrative model
  • – High Complexity lab that combines Toxicology and a wide array of Molecular Testing

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Note: When inquiring about the lab, please email from your business address, and provide some details about your background, your company, and your ability to buy this lab.

Contact Us

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