Alhambra-based physician group manager Apollo Medical Holdings Inc. on June 2 said that it will pay $4 million to acquire a controlling interest in El Monte-based Sun Clinical Laboratories.
The deal, which is expected to close within three months, is awaiting final approvals, according to Apollo Medical.
Sun Clinical, which was established more than 40 years ago, runs one main lab in El Monte and 19 sample draw centers throughout the San Gabriel Valley. The lab has certifications from the federal Centers for Medicare & Medicaid Services and the state Medi-Cal program.
Apollo Medical manages administrative and back-office functions for 14 physician groups comprised of more than 7,000 physicians providing care to more than 1.1 million patients. Most of the physician groups are in Southern California, though the company recently launched an expansion into the New York metro area.
Apollo Medical said in the announcement that Sun Clinical Laboratories has been a partner for some time. The deal will allow Apollo Medical to fully incorporate Sun Clinical Laboratories into its health care network.
Apollo Medical hopes that having an in-house clinical lab will lead to greater operational efficiencies and more integrated care for patients of the company’s physician groups.
“We are pleased to have entered into this agreement with Sun Labs, whereby ApolloMed will serve as the exclusive administrator of all daily business functions of Sun Labs,” Kenneth Sim, co-chief executive of ApolloMed, said in a statement.
“We look forward to further integrating Sun Labs into our comprehensive care delivery platform, providing a seamless, best-in-class experience for our affiliated physicians and members,” he added.
Sim said Apollo Medical also plans to work with Sun Clinical Laboratories to bring genomic testing services to its patient members, especially cancer patients.
Another goal of the deal is to pave the way for an expansion of Sun Clinical Laboratories into other geographic regions.
“As ApolloMed expands its geographic footprint, we see Sun Labs as a core partner in this expansion, growing the business and bringing high-quality lab services to more patients across the nation,” Sim said.
Sun Clinical Laboratories Chief Executive Frances Sun said in the announcement that Apollo Medical’s expertise in administrative matters was a key driver for the deal.
“For over 40 years, we have provided valuable diagnostic services to the people of the San Gabriel Valley, and we look forward to working closely with the ApolloMed team in improving and growing our business in the months and years to come,” Sun said. “We believe we have found the ideal partner in ApolloMed.”
Shares of Apollo Medical remained essentially flat in trading on the Nasdaq on June 2, closing up 2 cents to $35.19.