Crescent Capital’s pathology business Australian Clinical Labs is estimated by analysts at Goldman Sachs to be worth between $1.265 billion and $1.67bn, as the company gears up for an initial public offering.
The valuation range includes debt and comes after a bumper year for the company, during which earnings soared on the back of strong demand for COVID-19 testing.
The healthcare group is being prepared for a float through Goldman Sachs and Bank of America after it was on the market last year.
Australian Clinical Labs expects to generate $621m of revenue this year and $178m of earnings before interest, tax, depreciation and amortisation, the analysts say in their research.
It is Australia’s third largest private pathology network.
It has the largest network of approved collection centres in the Northern Territory, the second largest in Victoria and South Australia and the third largest in NSW and Western Australia.
Australian Clinical Labs expects to perform at least 90 million tests this year across its 995 collection centres and 30 clinics.
The Goldman Sachs analysts say the company’s growth is driven by the volume and mix of pathology tests, rather than inflation fees, demographic volume growth and an increasing prevalence of chronic diseases.
Also a growth driver is more visits to general practitioners, greater pathology testing per capita, and technological advancements allowing for a broader range of tests.
Goldman Sachs says in its view the experiences driven by the pandemic are likely to reinforce and increase demand for pathology services such as COVID-19 testing, greater focus on disease management and preventive medicine.
Australian Clinical Labs is forecasting revenue growth of 4.3 per cent this year and 0.3 per cent EBITDA growth.
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