Mergers & Acquisitions

Lab, Diagnostics

Over the last years M&A-activities in the laboratory industry have maintained a robust pace. In addition to general terms of target attraction like brand, size and innovation potential, there are a number of reason contributing to the increase in lab M&A-activities:

• Lower cost of capital.
• Consolidation in the fragmented marketplace lead to potential efficiencies of scale in laboratory operations, sales and marketing.
• Increasing tool set like molecular diagnostics enable to provide more personalised care leading to higher value diagnostics.
• Strategic value of access to patient samples speed time-to-market for therapeutics and diagnostics companies focused on the development of new tests and therapies.
• Reimbursement changes and increased “in-sourcing” of tests impact revenue and encourage middle-market laboratory owners to sell.

Clinical diagnostic labs differ by business model, size, technologies, disease foci, R&D capabilities, and relationships with healthcare providers and payors. The acquisition of a clinical diagnostic lab and the identification of the right target from thousands of labs can be daunting. Looking at the bidding landscape, large public laboratories as highly active buyers have been focused on deal volume, other players are or were increasingly interested in the laboratory testing market.  Life-science companies, diagnostic manufacturers and pharmaceutical companies need access to patient and pathology samples for research and development. Private equity firms are also active, they consider clinical testing a less cyclical market with fairly attractive cash flows yields. Finally, laboratories were strategically acquired by non-lab healthcare companies.

As a consequence of ongoing lab market concentration and globalisation ConAlliance is advising national and international strategic investors, Private Equity funds and family offices in managing and realizing their activities of merging, acquisition and cooperation with clinical laboratory and diagnostic companies.