NJ Medical Diagnostic Lab - 500+ Tests, $12.5M Revenue

$12.5M

Revenue

$1.3M

SDE

7.2x

Multiple

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Full Editorial Writeup

Fully equipped medical diagnostic laboratory has just come in the market, located within New Jersey, serving tri-state area.This facility offers over 500 plus tests, including molecular diagnostics,... Businesses Franchises Brokers Loading... The page you requested could not be found. Try retyping the address and trying again. If you think you have encountered a problem, please Contact Us. Find a Business for Sale All Business Categories Agriculture Automotive and Boat Beauty and Personal Care Building and Construction Communication and Media Education and Children Entertainment and Recreation Financial Services Health Care and Fitness Manufacturing Non-classifiable Establishments Online and Technology Pet Services Restaurants and Food Retail Service Businesses Transportation and Storage Travel Wholesale and Distributors Any State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Select County Search Businesses Find a Franchise Any Category AutomotiveBeauty and FitnessBusiness OpportunitiesBusiness ServicesChild RelatedCleaning and MaintenanceComputer and InternetEducationGreenHealth and Senior CareHigh CapitalHome Based BusinessesHome ServicesHotLow CostMaster FranchisesMobileMulti UnitPetRestaurant and FoodRetailSBA ApprovedSports and RecreationTravel and LodgingVeteran's Search Any State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Capital Available to Invest Up to $25,000 Up to $50,000 Up to $100,000 Up to $250,000 Up to $500,000 Up to $1,000,000 Up to $5,000,000 Search Franchises Useful Links BizBuySell Homepage Sell a Business Find a Broker Valuation Report Sitemap Contact Us Buy a Business Search for a Business Established Businesses Asset Sales How to Buy a Business Buy a Franchise Search Franchises For Sale Low Cost Franchises Restaurant and Food Franchises Business Opportunities Retail Franchises Sell a Business Sell a Business on BizBuySell Sell Multiple Businesses How to Sell a Business Value a Business Find a Broker Tools & Advice Learning Center Finance Center Market Insights Business for Sale Blog Business Brokers Find a Broker For Brokers My BizBuySell Dashboard My Business Selling My Listings Guide to Selling Add a New Listing Searching My Saved Listings My Saved Searches Franchise Recommendations BizBuySell Edge Edge Preferences Recommendations Location Insights BizBuySell Edge Edge Preferences Recommendations Location Insights Research Guide to Buying Valuation Reports Message Center My Mailbox My Inquiries Email Preferences Export Leads Account Account Settings My Billing Info BrokerWorks My BizBuySell Dashboard Leads Billing My Saved Listings My Saved Searches Account Sign Out Sign In a6301374279843840.cdn.optimizely.com a6301374279843840.cdn.optimizely.com is blocked This page has been blocked by an extension Try disabling your extensions. ERR_BLOCKED_BY_CLIENT Reload This page has been blocked by an extension

Why we like it

Diagnostic testing is genuinely recession-resistant demand. Physicians order labs regardless of the economy, reimbursement comes largely from insurers and government payers, and a 500-test menu including molecular diagnostics covers both routine and higher-value work. This is recurring volume tied to healthcare utilization, not consumer sentiment.
The molecular diagnostics capability is the real asset. Molecular and PCR-based testing carries higher reimbursement and margin than routine chemistry panels, and standing up that capability requires equipment, validation, and accreditation that competitors cannot replicate quickly. That capability plus the CLIA license is the moat.
Regulatory barriers to entry protect the incumbent. A licensed, accredited, equipped lab with existing payer contracts and physician referral relationships is hard and slow to build from zero. That difficulty is exactly why the seller can credibly ask a 7.2x multiple instead of a typical SMB 3x to 4x.
Revenue scale provides operating leverage. At $12.5M of throughput, the fixed cost base of equipment, lab space, and credentialed staff is already absorbed, so incremental test volume drops to the bottom line at high margin. A buyer who adds referral sources or test menu can expand EBITDA meaningfully without proportional cost.

How to improve it

Audit the payer mix and reimbursement rates in the first 90 days. Labs live and die on contracted rates and denial rates, so pull the top payers by volume, identify out-of-network exposure, and quantify how much revenue is at risk from reimbursement cuts. This single analysis determines whether the 10 percent margin is fixable or structural.
Attack the thin margin directly. A diagnostics lab earning only 10 percent on $12.5M is leaving money on the table relative to well-run labs that clear 20 to 30 percent. Map labor cost per test, reagent and supply contracts, and reject-and-rerun rates, then renegotiate vendor pricing and optimize staffing to the actual test volume.
Shift mix toward high-value molecular and esoteric testing. Routine panels are commoditized and reimbursed poorly, while molecular diagnostics command premium rates. Use the existing molecular capability to expand the higher-margin menu and steer referral volume toward those tests.
Grow the physician referral base. Lab revenue is a function of how many ordering providers feed the funnel, so build a small outreach effort targeting physician groups, urgent care centers, and clinics in the tri-state footprint. Each new high-volume referring account is durable, recurring revenue.
Tighten revenue cycle management. Denials, slow collections, and coding errors silently erode lab margins. Implement disciplined claims scrubbing, denial appeals, and aging-AR follow-up to capture revenue that is currently being written off.
Pursue in-network contracts and additional payer credentialing. Out-of-network billing is volatile and increasingly squeezed, so converting to in-network status with major payers stabilizes revenue even if headline rates compress. Predictable cash flow is worth more than volatile spikes.

Diligence notes

Reconcile the margin story immediately. A 10 percent cash flow margin on a diagnostics lab is low and demands explanation. Determine whether it reflects heavy owner add-backs not yet captured, genuine operating inefficiency, declining reimbursement, or a one-time revenue spike that is now normalizing.
Verify CLIA certification, state licensure, and accreditation status. The entire enterprise value rests on the lab being properly licensed and in good standing with CMS and the state. Confirm no open compliance deficiencies, proficiency testing failures, or pending sanctions that could halt operations post-close.
Scrutinize revenue concentration and the molecular testing tail. Confirm whether the $12.5M is broad-based across many referring providers or concentrated in a few accounts or a single test type. If a meaningful share came from pandemic-era or one-off molecular volume, the run-rate could be materially lower than stated.
Examine reimbursement risk and billing compliance. Lab billing is a frequent target for payer audits and recoupment. Review the payer contracts, out-of-network exposure, historical denial rates, and any past or pending payer audits or fraud-and-abuse inquiries before trusting the cash flow.
Confirm the founding date, ownership history, and reason for sale. The listing omits years in business and seller motivation, which matters at a 7.2x ask. Understand who runs the medical directorship and key technical roles, since lab operations depend on credentialed personnel who may need to transfer or be replaced.
Validate equipment condition and lease versus owned facility. The lab is described as fully equipped, so verify the age, maintenance, and remaining useful life of analyzers and molecular instruments. Confirm whether the facility is leased and whether the lease transfers, since relocation of a licensed lab is costly and disruptive.

Source

Originally listed on BizBuySell. View original listing →