Wednesday, 7 March 2018

S-2909-1 JPN Medical Lab Specializing in Drug and Alcohol Screening & Confirmation (Southeast US)

Business Description:
Located in Florida, this Company is an ideal acquisition for a strategic or private equity buyer as a new platform or as an add-on. The Company performs basic and highly complex drug and alcohol screening and testing. The Company provides all local pick-up and delivery, and its 24 to 48 hour rapid turnaround is a competitive edge, since work is performed locally. The Company is currently testing urine and blood, but has the capability to add additional testing. Its current customers include only rehab centers. All clients utilize using insurance coverage and submit payments electronically directly to the Company’s bank account. Although tests are submitted by rehab centers, the primary customers are the insurance companies that provide testing coverage.
Operational Strengths:
The Company is experienced in providing specialized testing and has developed strong working relationships with rehab centers which provide test samples and with insurers that cover the cost of testing. The Company serves 7 rehab centers, 3 of which were added in 2017. Key competitive advantages include large regional market with significant customer base, high margins, and capacity for growth. Customer service is a significant advantage:  Rapid turnaround of test results due to advanced software and performing tests in a local lab insure that customers receive test results within a day or two. Competitors send specimens to a central lab, requiring special packaging and taking an extra 2 or 3 days to generate results. As a means of reducing customer costs, the lab first runs an analyzer test, and, if the results are positive, uses the more expense LC-MS test. In 2017, the Company leased a new analyzer (first-stage test) that has tripled testing capacity. The Company is adding in equipment to provide blood testing to better service current customers and expand to servicing doctors (no retail). Owner provides customers with his cell number to insure quick resolution of issues. Quality control includes adhering to testing protocols and other best practices. Middle management, which runs the company on a day-to-day basis, provides excellent continuity for a new owner.

The Transaction:
Deal structure is flexible, and the owner will consider retaining some equity, and/or negotiating an earn-out after substantial cash payment at closing. Owner will remain for a transition period and will be available as a post-transition consultant. Testing equipment is leased, and the leases can be assumed by buyer. Company has successfully undergone 2 insurance audits without any findings. 2017 revenues were impacted by a hurricane Irma, and by an insurance audit which delayed payments until 2018.

Financial Summary

2018 [proj. by Seller]
4.4 M
3.8 M
3.8 M
2.2 M
1.9 M
2.1 M

Other Highlights
Management Team in Place
Years in Business
SIC Classification

 Direct All Inquiries to:

Gottesman Company
Refer to:  S-2909-1 JPN
Tel: 212-330-8010     Fax: 646-434-4557