Nelson Research Gets Agreement for Skin Patch : Nichols Institute Takes Steps to Acquire Lab

Nichols Institute, a San Juan Capistrano medical testing laboratory, said it has executed a preliminary agreement to acquire a San Diego clinical laboratory owned and operated jointly by American Clinical Laboratories Inc. and Palmer Laboratory Medical Group Inc.

The 10 shareholders of the selling entities are nine practicing pathologists and a laboratory manager who will continue their work in the two San Diego laboratories under the new ownership, said Donald S. Mullins, vice chairman and treasurer of Nichols.

The agreement, which is not legally binding, contemplates a purchase price of about $4 million, 10% of which would be in cash and the rest in promissory notes to be paid back through cash flow. Nichols said it expects to conclude the transaction within 60 days.

Albert L. Nichols, M.D., chairman and president of the institute, said the acquisition will provide Nichols Institute with expanded testing capabilities in toxicology, particularly in the area of drug screening. The institute, a clinical reference laboratory for hospitals, now offers 624 tests in such areas as immunity, hormones and cancer. The acquisition will enable it to add 50 to 75 additional tests, Mullins said.