Sonic Healthcare Acquires ProPath, PathGroup Buys Path Consultants

Two large private practice pathology groups decide to sell to larger pathology superlabs

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CONSOLIDATION AMONG PRIVATE PRACTICE ANATOMIC PATHOLOGY GROUPS continues with news that two large regional pathology groups decided to sell to larger pathology companies. 

The first transaction announced was on Dec. 16, 2021, when Sonic Healthcare of Sydney, Australia, disclosed that it had acquired Dallas-based ProPath. Sales price and other terms were not announced. 

The second transaction happened last week. On Jan. 24, Nashville-based PathGroup announced it had acquired Pathology Consultants of Greenville, S.C. Price and terms of this transaction were not disclosed. 

Pathology Consolidation

The decision by two of the nation’s leading regional pathology groups to sell themselves to larger pathology entities confirms that the trend of consolidation is continuing within the pathology profession. It is also a sign that smaller pathology groups will find it increasingly difficult to compete and stay profitable as new technologies transform the surgical pathology profession. 

ProPath was considered a financially strong regional super-group. Headquartered in Dallas, it operates facilities in three states and has 50 pathologists and 500 employees. In the press release announcing the acquisition, Sonic noted that ProPath’s annual revenue was about $110 million. 

Sonic Healthcare has been a major acquirer of anatomic pathology practices in the United States. In 2010 it acquired CBL Path for a purchase price of $123.5 million. (See TDR, Nov. 15, 2010.) 

Sonic Healthcare also purchased Aurora Diagnostics in 2018 for $540 million. That deal brought it 32 pathology practice sites and added 220 pathologists to its roster. (See TDR, Dec. 24, 2018.)

PathGroup’s Growth

With its acquisition of Pathology Consultants, PathGroup adds 30 pathologists and 100 employees currently working with the group headquartered in Greenville, S.C. Prior to this acquisition, PathGroup said it had 225 pathologists. 

Anatomic pathologists will want to understand why two major regional pathology groups have decided to give up their independence and sell to a larger company. The reasons are several and include: 

  • Need for cash to purchase the equity of retiring baby boomer pathologist partners in the group. 
  • Challenges in recruiting new pathologists to the group. 
  • Need for capital to acquire digital pathology capabilities and other needed advanced diagnostic technologies.
  • Access to managed care contracts as private health plans continue to narrow their provider networks. 

It should be noted that graduating pathology residents and fellows are tech-savvy and want to work in practices that have all the latest technologies in histology, scanning, and digital pathology.

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