Clinical Laboratory and Pathology Customers Will See Few Changes Under New Ownership

Sunquest Information Systems, Inc., has a new owner. Earlier this month, an investment consortium led by Huntsman Gay Capital paid an estimated $208 million to acquire a 51% controlling interest in Sunquest, which is based in Tucson, Arizona. Sunquest’s previous owner, Vista Equity Partners, will retain the remaining 49% of Sunquest’s stock and continue as a minority owner.

Sunquest’s flagship product is a laboratory information system (LIS) that is used by many clinical laboratory companies and hospital/health system laboratories in the United States and a number of other countries. It also sells an anatomic pathology information system, as well as other health informatics software products. The company says it has 1,400 hospital and medical laboratory customers worldwide.

Sunquest Sends Letter to Medical Laboratory Customers

Sunquest’s executive team is excited about the infusion of new capital into the company best known for its LIS and related software products. Over the past three years, the company has posted strong growth in revenue and operating profits. Sunquest President and CEO Richard Akin stated in letter to customers that “Huntsman Gay was chosen to be our new partner in large part because they share our focus of driving long term value through operational improvements.”

Akin also emphasized that, under its new owners, Sunquest’s clinical laboratory and anatomic pathology group customers could expect to continue working with the current management team moving forward. “There will be [no] day-to-day change in how you, our customers and potential customers, work with our teams,” he wrote. “Our vision, strategy, and our approach… remain unchanged.”

It was 2007 when Vista Equity Partners paid approximately $381 million to purchase Sunquest from Misys Healthcare Systems. By selling 51% of Sunquest to Huntsman Gay, Vista recoups more than half of its original investment, while keeping a 49% interest in Sunquest.

High Rates of Growth in Medical Laboratory and Pathology Testing

Independent of the money changing hands as part of the ownership transition, Sunquest is well positioned for growth. That’s because annual rates of growth in clinical laboratory testing is expected to be at double-digit rates for years into the future. This is one consequence of the growing incidence of chronic disease, as well as the higher incidence of disease that will accompany the baby boomers as they age into their sixth and seventh decades.

The timing of Vista’s sale of Sunquest to Huntsman Gay may be related to the high prices that have recently been paid in several laboratory acquisitions. Companies involved in medical laboratory testing have sold at very strong prices. For example, readers of Dark Daily are familiar with the sale of Clarient, Inc., to General Electric Healthcare last month for $587 million.

Related Information:

Huntsman Gay-Led Consortium Completes Recapitalization of Sunquest Information Systems

Huntsman Gay Buying Laboratory Software Company: Moody’s

An Idea Factory for Pathology Informatics… Huntsman Gay Purchases Sunquest Information systems

Sunquest Information Systems