MEDICAL

Nichols Institute, an operator of clinical laboratories in San Juan Capistrano, has signed a definitive agreement to complete a previously announced acquisition of North Central Laboratories in St. Cloud, Minn.

The transaction, which the company valued at $7.5 million, has been approved by the Nichols and North Central boards. It now must go to a vote of North Central shareholders.

If consummated, it will be Nichols’ third acquisition of clinical diagnostic laboratories since the first of the year, part of an effort to increase the company’s presence in the Midwest.

The laboratories are expected to send additional work to Nichols’ San Juan Capistrano reference laboratory, which specializes in performing difficult diagnostic tests that cannot be done in high-volume clinical laboratories.

Together, the acquisitions will expand Nichols’ annual revenue to $95 million from $55 million, according to projections by the firm’s treasurer, Norman W. Achen. North Central Laboratories reported revenue of about $7.6 million for the fiscal year ended June 30.

The merger agreement calls for St. Cloud shareholders to receive $1.15 in cash for each share of stock, plus one share of Nichols preferred stock for each 10 shares of St. Cloud stock. The preferred stock would be converted to Nichols common stock if the latter rises to a value of $25 per share. Nichols common stock has recently been trading for about $12 a share.