Q2 2023 Laboratory & Diagnostic Services Update
Lab & diagnostic services experienced a rebound in transaction volume in Q2 relative to the depressed volume seen in Q1. Despite constricted lending markets, valuation multiples have remained elevated for premium assets. Large players such as Quest Diagnostics and Labcorp continue to expand their national presence and diagnostic service offerings through add-on acquisitions.
Over the past four quarters, deal flow from strategic buyers in the lab & diagnostic services sector has substantially outpaced that of financial sponsors. Synergies such as test menu expansion, payor pressure to lower costs, and customer acquisition are driving increased competition for add-ons. Innovation continues to be the main catalyst for premium valuations from strategic acquirers as consolidators look to establish a differentiated diagnostic solution.
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