Proposed acquisition will add new anatomic pathology services, proprietary PCR tests and a national client base
Fulgent Genetics, Inc. (NASDAQ: FLGT) (“Fulgent”), a technology-based company with a well-established laboratory services business and a therapeutic development business, today announced that it has entered into a definitive agreement to acquire selected assets of Bako Diagnostics (“Bako”), a premier pathology laboratory headquartered in Alpharetta, GA and to acquire StrataDx, a premier dermatopathology laboratory located in Lexington, MA. Fulgent will acquire certain assets of Bako Diagnostics and will acquire StrataDx for a total combined purchase price of approximately $55.5 million, subject to adjustments, to be paid from cash on hand. The acquisition is expected to close during the first half of 2026, subject to satisfying customary closing conditions, including regulatory approvals.
Fulgent Genetics continues to build upon its laboratory services platform both organically and inorganically through multiple vectors, including expanding its test menu through R&D, partnerships, and acquisitions; increasing accessibility by adding covered lives through incremental managed care contracts; and scaling its commercial reach with an expanding sales organization. Fulgent’s scale and flexibility are enhanced by its foundational technology platform, which underpins operations across the business, including bioinformatics, clinical workflow, lab operations, record management, and artificial intelligence (AI). With the addition of Bako Diagnostics and StrataDx, Fulgent will further strengthen its laboratory services business by adding new products and services and further expand its national client base, national sales team, and team of expert pathologists.
Bako Diagnostics is a premier, national provider of specialty laboratory testing services, which offers a comprehensive testing menu, including complete anatomic pathology services, proprietary molecular genetic testing, and peripheral neuropathy immuno-histochemical testing. Bako Diagnostics is CLIA certified, CAP accredited and licensed by the Georgia Department of Public Health.
StrataDx is a premier national provider of dermatopathology testing services. StrataDx is CLIA certified, CAP accredited and licensed by the State of Massachusetts.
Strategic Rationale:
- Artificial Intelligence for Pathology: Fulgent has made significant investments in the fields of digital pathology and AI, including launching Eziopath – a proprietary image management system (IMS). By implementing these technologies, Fulgent can further improve Bako’s and StrataDx’s capacity, turnaround time, efficiency, and quality.
- Test Menu Expansion: The acquisition will enhance Fulgent’s capabilities in the pathology testing market, including Bako’s proprietary PCR tests that optimize cost and offer rapid results.
- Commercial Synergies: With the addition of Bako’s and StrataDx’s extensive testing capabilities and nationwide salesforce, Fulgent will advance to its goal of being a one-stop shop for diagnostic services throughout the healthcare continuum and across the United States. Bako’s national sales team will expand Fulgent’s reach for existing services, by nearly doubling the size of Fulgent’s pathology sales team. Bako’s nationwide clients will enable Fulgent to access more patients along key touchpoints to provide a comprehensive suite of diagnostic products and services leading to improved healthcare.
- Geographic Reach: Fulgent will expand its geographic footprint with the addition of CLIA, CAP, and NY State certified laboratories in Georgia (Bako) and Massachusetts (StrataDx).
Ming Hsieh, Chairman and CEO of Fulgent, underscored the strategic fit of the acquisition, stating: “We are pleased to continue to build upon our laboratory services platform with the addition of Bako and StrataDx, which will further expand and strengthen our diagnostic services. With the addition of Bako and StrataDx, we will be able to broaden our capabilities in the pathology testing market and further leverage our investments in AI to improve efficiency and quality, which will drive continued momentum in our laboratory services business. Our business has been growing organically at double digit rates for several quarters, and, following closing, we will be able to layer on Bako’s services to our testing menu to further strengthen our laboratory services business.”
“On behalf of Bako and StrataDx, we are excited about the opportunity to join the Fulgent Genetics family,” said Ted Hull, Bako and StrataDx’s CEO. “By joining forces, we will bring together advanced technology, digital capabilities, and specialized expertise to better serve our clients. This collaboration strengthens our commitment to delivering exceptional diagnostic solutions and enhancing the overall client experience.”
Sean Breen of Consonance Capital highlighted Bako’s trajectory and future potential as part of Fulgent, stating: “It has been a privilege to partner with the management team at Bako Diagnostics and StrataDx over the past decade. Bako and Strata have established themselves as market leaders, delivering differentiated diagnostic insights that improve clinical outcomes. As part of the Fulgent platform, Bako and Strata are well-positioned to accelerate growth and expand their reach. We are grateful to the entire Bako and Strata teams for their dedication and wish them the very best in this next chapter.”
Advisors
Piper Sandler & Co. acted as exclusive financial advisor and Mintz Levin, Cohn, Ferris, Glovsky and Popeo, P.C. served as legal counsel to Fulgent Genetics, Inc. in connection with the transaction.
EV Health Partners acted as exclusive financial advisor and Latham & Watkins LLP served as legal counsel to Consonance Capital Partners, Bako Diagnostics, and StrataDx.
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