Business Description

Highly regarded analytical testing lab founded in 2014, with 20%+ EBITDA margins and long-term contracts. The company has a highly trained team of 9 employees. Two of three founding owners wish to stay on as full time employees after transition, carrying out their roles as Chief Science Officer and Lab Director. The team also counts with an office manager, who oversees supply chain management and day-to-day operations. Given existing infrastructure and recent capital investments, the company can double its revenue without additional capital requirements. 

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Key Metrics

$1.7M TTM March’ 24 Revenue

$430K TTM March'24 EBITDA

$1.5M 2023 Revenue 

$315K 2023 EBITDA | Consistent profit margins from 2021 to 2023

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Background

This analytical testing lab, specializing in pharmaceutical and beauty product testing and formulation development, was established by three scientists with over 20 years of experience in the field. They provide comprehensive services, including product development, stability testing, and long-term storage. The company has made remarkable progress as an FDA-registered, GMP-compliant facility. With state-of-the-art equipment and a highly skilled team who will stay on through transition, this company excels in solving complex analytical problems, ensuring high-quality service and strong client relationships. 

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Key business details

• Balanced revenue model: 40% from analytical services, 40% from development services, and 20% from storage services
• Recurring revenue with long-term partnerships: Contracts with core clients drive 80% of revenue, showing the high quality of work, customer satisfaction, and revenue stability.
• Consistent revenue growth and profit margins: Over the past few years, this business has shown revenue growth and consistent 20%+ EBITDA margins.
• State of the art equipment: Key equipment includes High-Performance Liquid Chromatography (HPLC) system, Gas Chromatography (GC) system, Inductively Coupled Plasma (ICP) systems, Total Organic Carbon Analyzer (TOC Analyzer), Headspace Analyzers, valued at $750K to $1M
• Government facility Compliance: This facility is in compliance with FDA Qualified Vendor and GMP Testing Lab, providing a competitive advantage

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Growth opportunities

• Business development: Focusing efforts on visibility and marketing, such as attending conferences, bolstering online presence, and conducting advertising campaigns, would enhance visibility and attract new potential clients.
• Utilization of lab capacity: Facilities and equipment are not operating at full capacity, there is considerable opportunity for revenue growth without substantial capital investments. Topline could double using existing infrastructure. 
• Expand to international markets: Leverage FDA and European regulatory expertise to broaden client base and revenue streams‍
• Strategic partnerships and collaborations: Collaborating with pharmaceutical manufacturers and other relevant industries to establish mutually beneficial partnerships aim to expand service offerings and create opportunities for growth by leveraging the expertise of both parties.