April 10, 2006 “Intelligence: Late Breaking Lab News”

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Another private lab company appears to have sold for a strong price. On March 21, 2006, American Capital Strategies Ltd. of Bethesda, Maryland, announced that it had invested $79.5 million in Redwood Toxicology Laboratory Inc., a drugs-of-abuse testing laboratory based in Santa Rosa, California. The financing pack- age includes a revolving credit facility, senior subordinated debt, along with enough preferred and common stock to give American Capital Strategies a 67% equity interest in Redwood Toxicology Laboratory.

MORE ON: Redwood Tox

Redwood Toxicology Laboratory has annual revenues of approximately $30 million. So the announced investment of $79.5 million in debt and equity by American Capital Strategies indicates an aggressive valuation for a lab company serving the highly-competitive drugs-of-abuse testing marketplace. Company founder Bob Mount and his executive team hold the balance of the lab firm’s equity.


Last year, Intel Corporation disclosed its plans to focus on healthcare and develop specialized products designed to meet the needs of hospitals, physicians, patients, and the patient’s family members. Intel will use two strategies to develop its healthcare business. First, it wants to take an active role in developing new IT (information technology) standards for hospitals and clinics. In these settings, it is often difficult for different kinds of medical equipment to easily exchange information. Second, Intel is developing specific products tailored expressly to meet the needs of healthcare providers and patients in their homes.

ADD TO: Intel in Healthcare

For the past year, a special team from Intel Corporation has been collecting information about problems in how physicians and consumers use healthcare information. In recent weeks, Intel has publicly showed a prototype of a wireless-enabled, tablet-style computer designed for use by physicians and nurses. Among other things, when the clinician approaches a patient wearing an RFID (radio frequency identification) tag, the computer would automatically retrieve and present that patient’s medical file. This computer also has a built-in camera to allow the clinicians to share data with medical professionals in other locations. with this initiative, Intel is joining IBM, Motorola, and several other major IT vendors that have declared their intention to develop a major presence in the healthcare sector.


Pathology Partners, Inc., of Dallas, Texas, has a new CEO. Gail Marcus is filling the position left vacant when Stephen Spotts departed from the company in early February. Marcus comes from outside the laboratory industry. She has previous work experience with Pathology Partners’ Chairman, David Halbert. Halbert owns Caris, Ltd., the investment fund which holds a majority interest in Pathology Partners.


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