News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
Sign In

This Medical Laboratory Acquisition Positions Sonic in Nation’s Largest Lab Testing Market

Sonic Healthcare, Ltd. (ASX: SHL) acquired Physicians Automated Laboratory, Inc., (PAL) of Bakersfield, California, in a transaction that closed December 31, 2010. With this acquisition, Sonic Healthcare gains its first medical laboratory in California—the nation’s largest and most competitive market for clinical laboratory testing services.

Physicians Automated Laboratory was founded in 1967. It employs about 210 people and handles approximately 2,000 patient tests daily. One of the last of the pathologist-owned and operated local laboratory companies, PAL has two primary owners who are nearing retirement. Pathologist and Medical Director William Schmalhorst, M.D., is 80 years old. Chief Executive Officer C. Bruce Smith is 65 years old.

As of press time, Sonic Healthcare had not issued a press announcement about this acquisition. News of Sonic’s purchase of PAL was reported by the Bakersfield Californian newspaper last week.

Clinical Laboratory Acquisition Puts Sonic Healthcare in Central California

Although PAL is a modest-sized clinical laboratory business, it gives Sonic Healthcare a central location from which to build further business in California. Located at the southern end of the Central Valley, PAL is within a two-hour drive to the heavily populated counties of Los Angeles, Ventura, Orange, San Bernadino, and Riverside. Going north, PAL’s location in Bakersfield is about a four to five-hour drive to the large population centers of Sacramento and the San Francisco Bay area.

Sonic Healthcare’s acquisition of Physicians Automated Laboratory comes about six weeks after its most recent acquisition. On November 8, 2010, Sonic announced that it would pay US$123.5 million to purchase CBLPath, Inc., headquartered in Ocala, Florida. CBLPath has annual revenues of about $80 million. CBLPath primarily offers a test menu of anatomic pathology assays.

Sonic’s last acquisition of a clinical laboratory company was about 12 months ago. In December 2009, Sonic Healthcare purchased East Side Clinical Laboratory, in Providence, Rhode Island. Earlier in 2009, Sonic Healthcare acquired Axiom Labs (Tampa, Florida) and Piedmont Medical Labs (Winchester, Virginia) in June and August, respectively.

Related Information:

PAL Sells to Australian Company

Sonic Makes Big Play in Anatomic Pathology With CBLPath Buy; THE DARK REPORT, November 15, 2010

Sonic Healthcare to Acquire CBLPath

Sonic Healthcare Enters New England with Latest Clinical Laboratory Acquisition

Sonic Healthcare’s Latest Lab Buying Spree Nets Two U.S. Labs for $20 Million