Deal may be just the first of more clinical laboratory acquisitions in the U.S by Japan’s largest medical lab testing company
Pathology and clinical laboratory testing companies continue to go global and last week’s big acquisition in anatomic pathology gave one of Japan’s biggest clinical laboratory companies an important foothold in the United States.
Miraca Holdings Inc. (TYO: 4544.T) of Tokyo, Japan, announced that it would acquire the anatomic pathology business of Caris Life Sciences, Inc., of Irving, Texas. Miraca says the purchase is the first ever by a Japanese company of a clinical laboratory testing company in the United States.
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. (more…)
Meanwhile, both Quest Diagnostics and LabCorp report second quarter declines in specimen volume
Fewer patients visiting physician offices during second quarter 2010 is considered to be one reason why specimen volume declined at clinical pathology laboratory testing giants Quest Diagnostics Incorporated (NYSE: DGX) and Laboratory Corporation of America (NYSE: LH) during that three-month period.
For second quarter, LabCorp reported a 2% decline in specimen volume, along with a 4.2% increase in revenue. At Quest Diagnostics, the specimen volume decline was 1.3% and revenues declined by 1.4% in the second quarter 2010, compared to second quarter 2009.
Healthscope bids also fuel speculation of a big clinical pathology transaction
Last week in Australia, investment insiders shared rumors that Quest Diagnostics Incorporated (NYSE: DGX) was interested in acquiring Sonic Healthcare Ltd. (ASX: SHL). However, press stories discounted the possibility of a deal between these two billion-dollar clinical pathology laboratory behemoths. Neither company has issued a public statement addressing this issue.
In assessing the possibility of Quest Diagnostics acquiring Sonic Healthcare, the Sydney Morning Herald (SMH) threw cold water on the idea. It pointed out that Sonic’s stock price is trading at a multiple of 10.8 times earnings before interest, taxes, depreciation, and amortization (EBITDA). That would make Sonic an expensive purchase for Quest Diagnostics, since Quest’s share price trades at a multiple of seven times EBITDA. Further, SMH’s reporter pointed out that Sonic’s market capitalization of A$5.7 billion would make it a major acquisition for Quest Diagnostics, which has a market capitalization of U.S.$9.5 billion.