What should I check before buying an environmental testing lab?
Before buying an environmental testing lab, check which consultants send most of the samples, the age and service history of the instruments, sample tracking and chain-of-custody records, turnaround performance, and which analysts will stay. Ask your lawyer whether accreditations survive a change of owner.
A testing lab sells reliable results delivered on time. Its clients are mostly consultants and contractors who send samples and expect a report they can stand behind. When you look at a lab for sale, you are checking whether those clients will stay, whether the instruments can keep producing, and whether the records would hold up if a result were ever challenged.
Who sends the samples
Ask for sample volume by client over several periods. If a few consulting firms send most of the work, find out how long each has used the lab and why. A consultant who owns or shares a lab, or who could move work elsewhere easily, is a risk you can name. Ask whether any client has said it would leave if ownership changed.
Instruments, tracking and turnaround
Request an instrument list with age, service contracts, repair history and any planned replacements. Replacement is a real cost, so ask your accountant how to treat it in your review. Then read the sample tracking and chain-of-custody records for a few jobs from receipt to report. Ask how often the lab met its promised turnaround, and what it does when it falls behind.
Accreditation and people
Labs often hold accreditations that clients rely on. Ask what they are, when each was last assessed, and any findings that remain open. Whether they carry over to a new owner is a legal and regulatory question, so put it to your lawyer early. Meet the analysts and quality staff, and ask which of them are staying. See also what environmental checks you need.
Related reading
10 pages on the same subject, grouped by topic.
Due diligence
Buying
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 03Business Development Bank of CanadaGovernmentWhat are financial statements?
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