Sonic purchased Piedmont Medical Laboratory of Winchester, Virginia, and Axiom Laboratories, of Tampa, Florida
Yesterday, Sonic Healthcare, Ltd., of Sydney, Australia, officially recognized the acquisition of two clinical laboratories in the United States: Piedmont Medical Laboratory of Winchester, Virginia, and Axiom Laboratories, of Tampa. The Axiom transaction was closed earlier this summer.
For both labs, Sonic will pay $20 million in cash and could pay $2.5 million more in performance-based bonuses over the next two years. As an indication of current pricing for laboratory services, the $20 million purchase price bought Sonic a total of approximately $16 million in annual revenue.
Of the two acquisitions, the more interesting is Piedmont Medical Laboratories, which was owned by Valley Health. With yearly revenue of $11 million, it currently serves eight hospitals in the Shenandoah Valley. It operates 13 patient service centers and serves 300 physicians and nursing homes in its outreach program. Its service area includes suburbs west and south of Washington, DC. Piedmont Medical Lab was first in the nation to achieve accreditation under ISO 15189 last year. (See Dark Daily, First Two Laboratories in U.S. Earn ISO 15189 Accreditation)
With $5 million in annual revenue, Axiom Laboratories is a smaller operation. Founded in 1995, Axiom operated as a radiology provider, running six radiology centers in the Tampa Bay area and one in Haiti. In 2006, Axiom acquired a Tampa laboratory and currently operates labs in Tampa, Orlando, and Miami, Florida; and in Haiti. The company’s pathologists run the pathology departments at three hospitals in Tampa: University Community Hospital, Memorial Hospital, and Brandon Regional Hospital.
Both acquired laboratories are located in regions where Sonic Healthcare has existing laboratory operations. For example, Tampa-based Axiom Labs is near Sonic’s current operations in Orlando, Florida, while Piedmont supplements Sonic’s business division in the Washington, DC area.
These two lab acquisitions show that Sonic Healthcare continues to be opportunistic as it works to expand its market presence in the United States. In the case of Piedmont Medical Laboratories, the willingness of its parent health system to sell its clinical laboratory business is likely due to a desire to raise cash. Valley Health has posted strong financial numbers in recent years, but has an active expansion program underway. It has bought hospitals and has land it wants to develop.