RushNetInc. (OTCMKTS: RSHN) with its acquisition/merger target, heliosDX has announced a binding letter of intent to purchase a privately held lab with revenues of $10 million annually, processing over 5,000 tests per month and with a 12,000 monthly capacity of UDS tests.
Transaction to expand heliosDX’s capacity
The acquisition expands heliosDX’s national coverage while lowering expenses, multiplying the sales team, and significantly boosting the ability to perform more UDS tests. Notably, the tests provided by heliosDX, when combined with those provided by the new lab, will result in a larger joint testing capability. As the industry evolves, it is clear that we must increase our sales volume and reach in order to win larger national contracts, especially with medical organizations and insurance companies, which is crucial to heliosDX’s long-term success. Most importantly, the acquisition will expedite the process while at the same time offering more diagnostic alternatives at clinic sites not available currently, such as Allergy, PCR, and PGx.
RushNet expects combined revenue of $16 million after closing the transaction.
The companies will have combined year revenues of over $16 million once the transaction closes. In addition, they will cut costs by 10%, with operating margins increasing by 10% due to operational efficiency. Consequently, there is a significant prospect for expansion and improved profitability. After a full year of integrated operations, revenue is likely to range between $20 million to $25 million. In addition, heliosdDX will also process over 18,000 UDS samples each month, thanks to the increased manufacturing capacity.
Following the close of the transaction, heliosDX anticipates processing over 7,500 UDS samples each month with a target of over 10,000 samples monthly. Most importantly, the transaction benefits heliosDX’s bottom-line while ushering in a new age of scalability. The deal could close in Mid-September or early October, and both parties are looking to expedite the process.