Laboratory testing firm Solstas Lab Partners is sating its acquisition appetite with more deals, this time acquiring two lab firms in Wilmington, North Carolina.
Nextwave Diagnostic Laboratories and Wilmington Pathology Laboratory represent Greensboro, North Carolina-based Solstas’s third and fourth acquisitions in the last year, and executives say they’re eying even more.
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“We expect to close a couple more transactions within the next 30 days that will continue to expand our coverage and geographic area,” Bud Thompson, Solstas’s executive vice president, told MedCity News.
The Wilmington deals follow the June acquisition of Select Diagnostics, also based in Greensboro. Last September, Solstas acquired Georgia company Doctors Laboratory.
Solstas has not disclosed financial terms of any of those deals. But the recent acquisitions follow a June investment from healthcare venture capital fund Ascension Health Ventures. While Ascension touted its investment, the firm did not say how much money it invested in Solstas. The main financial muscle comes from majority owner Welsh, Carson, Anderson & Stowe, a private equity firm that first invested in the company in 2009.
Thompson said that Nextwave and Wilmington Pathology Laboratory give Solstas the opportunity to expand its offerings along coastal North Carolina. Nextwave’s customer base consists primarily of local physicians and nursing homes. Wilmington Pathology Laboratory focuses on cytology, particularly Pap and human papillomavirus tests. The company also has an exclusive contract to provide services to Wilmington Pathology Associates, a Wilmington-based anatomic pathology group that will remain independent but still partner with Solstas. Acquisitions in the last year have grown the Solstas East Coast footprint from Maryland to Florida and as far west as Kentucky.
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Solstas provides laboratory testing services to hospitals and clinics. The company competes against lab testing giants Quest Diagnostics (NYSE:DGX) and LabCorp (NYSE:LH), based in Burlington, North Carolina. Solstas is a much smaller player; while Quest and LabCorp measure their revenues by the billions of dollars, Solstas is now approaching $400 million in annual revenue, Thompson said.
But Thompson says that laboratory testing is a fragmented industry, which leaves room for regional players. He adds that Solstas is offering hospitals something different than its larger competitors: a chance to participate in Solstas’s growth through equity stakes in the company. Minority investors in Solstas include Novant Health of Winston-Salem, North Carolina, as well as Carilion Clinic in Virginia and Wellmont Health System in Tennessee.
