San Juan Capistrano-based Nichols Institute has agreed to acquire two San Diego independent laboratories for a combined price of about $650,000, the diagnostic testing company said last week.
Effective April 1, Nichols will acquire Mission Bay Reference Laboratory. The facility has been jointly operated by two San Diego-area hospitals owned by American Medical International. In a separate transaction, Nichols this week will also acquire a smaller operation, California Reference Laboratory, which is owned by Dr. Larry Steinberg and Dr. Max Elliott.
The combined price of about $650,000 includes $45,000 in cash and is contingent upon the laboratories' future revenues, Nichols said.
William A. Mahan, Nichols' senior vice president and chief executive officer, said he expects that the two acquisitions will add about $1.1 million to Nichols' net revenues. The operations could add "a couple hundred thousand" dollars to Nichols' annual pretax income, Mahan predicted.
The acquisitions were announced Friday, less than a week after Nichols reported profits for its first fiscal quarter increased 160% to $83,000 from $32,000 the year before.
For the period ended Feb. 28, Nichols said, revenues were $11.2 million, up 47% from the $7.6 million posted last year.
In its 1986 fiscal year ended Nov. 30, Nichols lost $108,000 on annual revenues of $34.9 million.
Dr. Albert L. Nichols, chairman and president, attributed the company's increased sales to its expanded clinical laboratory chain and the growing acceptance of its line of diagnostic test kits.
Both acquisitions will be merged with American Clinical Laboratories, a San Diego-based Nichols' subsidiary. The laboratories will be operated as American Clinical Laboratories. Of the 20 to 25 employees involved, only one or two layoffs are expected, said Mahan and an AMI spokeperson.