Medical Research - Platform for Growth at High Margins

SC

Medical Research - Platform for Growth at High Margins

Asking Price:$7,000,000

Cash Flow:$1,543,000

Gross Revenue:$4,101,000

EBITDA:$1,393,000

FF&E:$43,000

Inventory:N/A

Established:1997

Medical Research - Platform for Growth at High Margins

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Business Description

The Company conducts Phase II-IV clinical trials for drug companies and the contract research organizations (CROs) that often manage clinical trials for drug companies. The trials are largely part of the FDA approval cycle for bringing a new drug to market. The Company recruits patients and collects data over a series of patient visits in accordance with a detailed protocol issued by the drug company. The Company has a diverse mix of business compared to the industry and enjoys substantial repeat business. It has a multi-specialty focus, with experience in over 50 medical indications in the last 5 years, and its customer base includes over 90 drug companies, including the top 10 R&D spenders (Novartis, Roche, Merck, Pfizer, Sanofi, Johnson & Johnson, Eli Lilly, GlaxoSmithKline, AstraZeneca and Amgen) and 35 CROs, including Quintiles, Covance, PPD, Parexel, ICON, INC Research, inVentive and PRA. Trials range in longevity from 1-2 months to over a year, and contracts range from $15-20K on the low end to over $2MM in a past year. Since 2011, the Company has experienced increasing demand for its services, and has been growing its core revenue 24% annually since then. It is well positioned for continued revenue growth and margin improvement in 2015 and beyond.

Detailed Information

Employees:
23
Furniture, Fixtures, & Equipment (FF&E):
Included in asking price
Facilities:
The Company is located in 7,000 sf of medical office space on accessible, major thoroughfares, and in close proximity to a medical center, physician offices and offices of other medical providers.
Competition:
Demand for medical research significantly exceeds supply. Medical centers cannot fulfill demand. Medical practices are not focused on research. Dedicated research sites, such as the Company, are attractive to drug companies and their contract research organizations (CROs) because they are focused on research, produce high patient enrollment and quality data, and get faster results. Because of the high demand, this is a business where overall competition is moderate to low.
Growth & Expansion:
Strong growth potential exists. 1) Expand to new therapeutic areas or drill deeper into existing areas. 2) Develop alliances with physician practices. 3) Pursue more available contracts / Build customer base. 4) Enhance patient recruitment abilities. 5) Increase utilization of existing capacity. 6) Start additional sites in the Company s region. 7) Expand into Phase I work. 8) Acquire a site elsewhere and pursue 1)-7).
Financing:
Negotiable. Seller will find offers minimizing seller paper most attractive.
Support & Training:
Sellers will support a successful transition and want to continue their roles post-acquisition. One Seller wants to retire in 2-3 years, providing an ample transition period to locate and train a replacement. Other Sellers have a longer-term focus for post-acquisition work. Along with the Sellers, other managers and key staff are in place to run day-to-day operations.
Reason for Selling:
Positioning for future Seller retirement(s).

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David Blackburn

Business Listed By:
David Blackburn

Insight Business Consulting

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