Atlantic Street Capital is preparing for a sale of Lab Logistics, an outsourced medical logistics and courier service provider, according to three sources with knowledge of the firm’s plans.
Lincoln International has been engaged for sell-side financial advice, the source said. A process is anticipated to kick off in April or sometime in Q2, they said.
Based in West Haven, Connecticut, Lab Logistics provides dedicated‐route transportation solutions to more than 300 medical laboratories and hospitals in the US. Courier services include the handling of specimen, supplies, reports, pharmaceuticals, slides and mail. Its courier tracking technology enables online ordering, barcode scanning, route tracking and other online tools for reporting.
Price expectations are unclear ahead of the process, however one source placed EBITDA at approximately $50 million and another estimated EBITDA at $60 million-plus.
Fueling growth under Atlantic Street, Lab Logistics has closed four add-on acquisitions, according to the firm’s website. That includes its 2018 acquisitions of Hospital Couriers and Path-Tec from Fulcrum Equity Partners.
Potential buyers may view Lab Logistics as a good platform to continue to go after more scale and regional density – which is the key to building a strong logistics network, one source noted.
The upcoming process also comes at a time in which healthcare organizations, pressured through covid, remain eager to drive cost savings across the supply chain. Lab Logistics boasts that it consistently saves their clients 18 to 40 percent in courier costs.
Further, Lab Logistics – in the business of medical supply and specimen transport – has likely seen a bump in business through the pandemic as demand for such services has spiked, sources said. For example, the company has been involved with the roll out and distribution of covid-19 vaccines, according to a local Greenwich Time news report.
The potential sale of Lab Logistics looks poised to produce a strong outcome for Atlantic Street, which typically invests in businesses with EBITDA of $4 million to $20 million with equity commitments of $15 million to $75 million.
Atlantic Street invested Lab Logistics in 2018 through Fund III, which closed in 2016 with $210.5 million of committed capital. Fund IV closed on $500 million in September 2019.
The operationally focused firm, which has offices in Greenwich, Connecticut, New York and Palm Beach, Florida, partners with entrepreneurs, closely held family-owned businesses, and management teams.
Atlantic Street in 2020 completed four platform investments including in Zips Car Wash, Uniguest, Tambourine and StratX IT/Compufit.
Atlantic Street declined to comment, while Lincoln International and the company did not return PE Hub‘s requests for comment.