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Paris threatens private equity-owned laboratory groups with profit caps

Wave of restructurings among indebted companies expected after government-led audit

France’s heavily-indebted laboratory groups are poised for a wave of restructurings, after a government-led audit of the sector recommended measures including profit caps to slash outsized margins.

The recommendations published last month by the government body in charge of auditing France’s health sector said that “measures must be taken to bring the cost of biology back to a fair price”, including “the introduction of profitability-based regulation”.

France’s medical laboratory sector includes some heavily-indebted companies that have been acquired through leveraged buyouts in recent years, as private equity firms target an industry that generates margins that are much higher than the rest of France’s broader medical sector.

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