Diagnosing expansion limits: Alab’s battle for capital and scale

Poland’s second-largest laboratory diagnostics provider continues to grow at a double-digit pace despite sweeping changes within the company. Integration following a record-breaking acquisition is taking longer than expected, but limited access to financing remains the biggest challenge. The company’s acquisition plans – both at home and abroad – are ambitious, and a new strategy is already on the horizon.

The successful stock-market debut of Diagnostyka on the Warsaw Stock Exchange (its market capitalization has already reached around PLN 6 billion, or approximately EUR 1.4 billion) made many investors aware of just how promising the laboratory testing market is. The performance of Alab Laboratoria, the runner-up in Poland’s diagnostics sector, points in the same direction. More than half of the company is owned by Germany’s Limbach Gruppe. However, one-third of the shares are still held by the founder, Dr. Bogusław Gnatowski, who recently returned to the business after a break of several years.

Despite a form of ongoing restructuring that has now entered its second year, Alab has continued to increase both revenue and EBITDA by several percentage points annually. In 2025, the figures reached approximately PLN 780 million (around EUR 182 million) and PLN 70 million (around EUR 16 million), respectively.

“Changes always come before results, and we are undergoing a great deal of change. I believe we will start seeing the effects this year. We expect significantly stronger performance. We are optimizing processes across many areas. The most important structural and strategic changes include the sale of our food-testing division and the transfer of veterinary diagnostics into a separate entity. Within Alab Plus, we are retaining histopathology and genetics because of the synergies they generate, particularly in the field of oncology diagnostics,” says Bogusław Gnatowski, who laid the foundations for what would become Alab Laboratoria in 1987.

A record-breaking acquisition and a major investment

At the beginning of 2025, Alab completed what was the largest acquisition ever seen in Poland’s laboratory diagnostics sector. For the first time, the scale of a transaction in the industry required the involvement of Poland’s Office of Competition and Consumer Protection (UOKiK). The company acquired Centrum Diagnostyki Laboratoryjnej (CDL) in Łódź – an operator of 14 laboratories and 40 sample-collection points – for several dozen million zlotys.

The integration process is still ongoing due to its complexity.

“Unfortunately, our suppliers failed to meet agreed deadlines, so we are still incurring unnecessary costs related to the restructuring of laboratories in several regions. Naturally, there have also been challenges associated with harmonizing standards across different areas of the business. However, we are now in the final stage of the integration process. One important milestone behind us was a key meeting with clients in the Łódź region,” explains Bogusław Gnatowski.

Over the next three years, he aims to build a laboratory in Łódź comparable in size to Alab’s facility in Warsaw. The planned site could cover around 8,000 square meters and have the capacity to process between 12 million and 15 million tests annually.

“The purchase of land and construction of a state-of-the-art laboratory would require an investment of approximately PLN 60–80 million (around EUR 14–19 million). Equipping the facility would require a similar amount again,” says Bogusław Gnatowski.

Acquisitions in Poland and abroad

The consolidation of Poland’s laboratory diagnostics market continues unabated. In the first quarter of 2026 alone, Diagnostyka completed six acquisitions. Alab remains active as well, particularly in the fields of histopathology and genetics.

The company has already acquired several laboratories this year. Advanced negotiations are underway with the owners of additional targets, and Alab plans to complete further acquisitions before year-end. Bogusław Gnatowski estimates that several dozen independent entities remain to be consolidated in Poland, with combined annual revenues of PLN 500–600 million (approximately EUR 117–140 million).

“However, the pool of potential targets is not particularly large, because the vast majority are small businesses. Only a handful generate annual revenues in the range of PLN 10–15 million (around EUR 2.3–3.5 million). The biggest obstacle is the high valuation levels in the sector, which are sometimes disconnected from reality. On average, a company in our industry is valued at roughly its annual revenue. That said, valuation multiples vary considerably, and in the case of specialized testing, we are often talking about significantly higher figures,” says Bogusław Gnatowski.

The company is also exploring acquisition opportunities abroad, primarily to gain access to new technologies, particularly in genetics. In recent years, Alab has acquired two companies – one in the United States and another in Western Europe. Bogusław Gnatowski declined to disclose further details.

“I will only say that we faced enormous difficulties in securing financing for investments outside Poland. We have no plans to open laboratories abroad, at least not for the next several years. Our strategy is focused on other priorities. This year, we are bringing our ‘Ukraine’ project to a close. After several years of investment, we concluded that we were wasting both time and money. It is simply too difficult a market for us to operate in – and not because of the war,” says Bogusław Gnatowski.

Expert's perspective

Market structure suppresses the true demand for diagnostic testing

Today, Poland’s laboratory diagnostics market is driven primarily by the growing role of testing in patient care. Laboratory tests are being used increasingly in preventive healthcare, the monitoring of chronic diseases and clinical decision-making.

The market’s biggest challenge remains its funding model. In Poland, laboratory diagnostics is not sufficiently ring-fenced as a separate funding stream within the public healthcare system administered by the National Health Fund (NFZ). This limits the scope for ordering tests, particularly where diagnostic decisions must be made within the constrained budgets of healthcare providers.

Compared with healthcare systems in countries where diagnostics has a more clearly defined place in funding structures, Polish physicians – operating under budget caps and lump-sum reimbursement schemes – have relatively weak incentives to order additional tests. This remains true even when such tests could improve diagnostic accuracy or reduce treatment costs at later stages. The result is a structurally suppressed level of demand for publicly funded diagnostic testing that fails to reflect the population’s actual healthcare needs.

Private funding channels – including out-of-pocket spending by individual patients, medical subscription plans, private health insurance and occupational health services – provide a degree of support. This segment generates additional demand for diagnostic testing, but only partially offsets the constraints created by the public funding model.

On the supply side, market growth is being supported by increasing laboratory automation and ongoing consolidation. The largest players are optimizing their laboratory networks, improving productivity and investing in scale. The market is already concentrated around a handful of major operators, and the transactions seen in recent years suggest that further consolidation lies ahead. According to our estimates, network-based laboratory operators – including Diagnostyka and Alab – achieve productivity levels roughly three times higher than those of independent laboratories.

Marta Marszałek

Lead Analyst for the Pharmaceutical and Healthcare Market, PMR by Hume’s

A systemic problem in financing international expansion

The entrepreneur stresses that Polish businesses face constrained access to financing. This applies equally to domestic financial institutions and the local subsidiaries of international banking groups.

“Obtaining a bank loan is, to put it mildly, a via dolorosa [the president of the Office of Competition and Consumer Protection (UOKiK) also pointed to this issue among small and medium-sized enterprises in Poland in an interview with XYZ – ed.]. If this does not change, Poland’s economic development will be driven by foreign capital and foreign investors, who do not face the same financing constraints. Moreover, they have accumulated wealth over generations, unlike us. We are effectively reducing ourselves to a supplier of labor,” says Bogusław Gnatowski.

He notes that two of his acquaintances recently sold well-performing companies to corporations from the United States and the Netherlands.

“They told me directly: continuing to raise capital for growth had become beyond their capacity. As a result, there is a lack of continuity in Polish business. Many companies end with the first generation of Polish owners. And we should remember that capital has nationality,” he says.

In his view, the approach to financing Polish entrepreneurship has not improved over the past three decades and may have even deteriorated. He argues that the problem is systemic.

“When banks are faced with a choice between high-interest consumer and retail lending and lower-yield investment loans, the decision is straightforward. And even when a company does obtain financing, the terms and covenants are often discouraging. For example, one may need approval to expand the scope of business activity or to pay dividends,” says the founder of Alab Laboratoria.

More sample collection points and pathology centers

The company is not limiting its expansion to acquisitions. In parallel, it is improving the standards of its existing sample collection points and expanding its network. At the end of 2025, it operated 780 such points, and this year the number is expected to approach 900. The number of diagnostic tests performed has increased from 90 million to approximately 110 million.

“Our central laboratory in Warsaw is starting to feel cramped. We will most likely relocate part of the office space to another site and repurpose the freed-up area for laboratory use,” says Bogusław Gnatowski.

In April, the company opened the Lower Silesian Centre for Pathomorphology in Wrocław. It aims to stay closer to patients, driven by the very rapid growth of histopathology services.

“Although technology already enables effective remote assessment of collected samples, many centers still expect a specialist to be present on site. Therefore, we are planning to open several similar laboratories in other regions of Poland in the near future,” says Bogusław Gnatowski.

Alab’s new strategy in the making

For the past six months, Alab has been working on a new strategy, a process that will still take some time. The company is not doing it alone.

“This process requires consistency and discipline, which is why it is useful to have an external partner that helps maintain the agreed timeline. This stems from the fact that operational work always takes priority. The priority is putting out fires. Only afterwards do you think about strategy, which is undoubtedly a mistake,” says Bogusław Gnatowski.

Many entrepreneurs avoid working with consultants, and when they do engage them, they often complain about the results. The founder of Alab stresses that it is essential to be mature enough to understand what one expects from a consulting firm.

“Some assume that consultants will come in and do all the work themselves. Nothing could be further from the truth. We are working with such support on strategy for the second time. We have had positive experiences in jointly defining strategic objectives and implementing them together with our consultants,” says Bogusław Gnatowski.

Technological innovation and exclusive access to advanced diagnostics

According to Alab’s founder, strategy is a system of choices and trade-offs. It involves systematically deciding what to pursue and what to forgo. Two areas are particularly important.

“The first is the implementation of technological innovation where it is justified. For example, automation means that work that recently required 200 people can now be performed by just a dozen or so employees. Automation is necessary due to an increasingly tight labor market. Some specialists are effectively a scarce resource. In Poland, there are around 600 pathologists, while more than 1,000 medical facilities perform procedures requiring their consultation,” says Bogusław Gnatowski.

The second area involves the introduction of world-class innovative diagnostic tests. Alab holds exclusive distribution rights in Poland for tests such as suPAR, “Biological Age – Humanity,” and NOV-NGS, a universal screening panel assessing genetic predispositions to cancer development.

“This is only the beginning. Our collaborations with leading scientific centers around the world are expected to result in additional tests that enable more precise diagnostics. Poland’s laboratory diagnostics sector has the potential to become an important hub for advanced medical services in Central and Eastern Europe,” says Bogusław Gnatowski.

The role of Artificial Intelligence in diagnostics

Artificial intelligence is becoming increasingly important for Alab. It improves operational efficiency, significantly speeds up the analysis of test results, and helps detect what may be overlooked by the human eye. However, AI’s greatest potential lies in assessing disease risk.

“Since 1900, average life expectancy in Europe has doubled from 40 to over 80 years. The human body is ‘programmed’ to live for around 120 years. So where do the missing 40 years go? This is primarily the consequence of four main causes of death: cardiovascular diseases, cancer, neurodegenerative diseases, and type 2 diabetes,” explains Bogusław Gnatowski.

He emphasizes that these conditions cannot be eliminated on a population-wide basis in the way infectious diseases have been. Vaccines against them are not foreseeable, at least not in the near future.

“However, we can significantly reduce their incidence and consequences, provided they are detected early enough. This requires predictive assessment of the risk of developing specific diseases. Analyzing, for example, millions of different gene combinations requires technology. It exceeds the capacity of the human mind,” says the founder of Alab.

Longevity trends and regulatory absurdities

This direction of development is closely linked to the growing longevity trend. Alab does not plan to move beyond its core business. It still sees significant room for growth in advanced genetic testing and the measurement of various biomarkers that enable a better assessment of metabolic health, organ function, and even individual cellular condition.

“However, we do not intend to leave patients with test results without any recommendations for further action. To that end, we will be cooperating with medical facilities capable of properly caring for our patients,” says Bogusław Gnatowski.

He acknowledges that expanding the diagnostic offering is not straightforward, mainly due to the highly time-consuming nature of knowledge transfer. In the United States, it typically takes 20–25 years from documented test effectiveness to its widespread commercial adoption.

“It is difficult to enter a highly rigorous diagnostic pathway and convince the medical community to adopt a new so-called gold standard. And once we manage to introduce innovative tests into our offering, it is easier to scale them in the B2C channel than in B2B. Medical institutions operate under strict procedures, and administrative processes move slowly. Meanwhile, many patients are actively seeking new diagnostic options,” says the founder of Alab.

Although the segment of tests paid directly by patients already accounts for 35% of the business and continues to grow, there remains a barrier.

“We are dealing with a regulatory absurdity. On every screen in Poland, we are bombarded with advertisements for drugs that ‘target the center of pain.’ Yet promoting preventive tests that help avoid potential diseases is prohibited,” says Bogusław Gnatowski.

Key Takeaways

1. Growth despite deep transformation and continued expansion. Alab Laboratoria continues to post double-digit growth in both revenue and EBITDA. In 2025, these reached approximately PLN 780 million (around EUR 182 million) and PLN 70 million (around EUR 16 million), respectively. This performance comes despite significant organizational changes, which are expected to start delivering results this year. The company closed last year with 780 sample collection points and is expected to approach 900 this year. The number of tests performed rose from 90 million to around 110 million. In April, the company opened the Lower Silesian Centre for Pathomorphology in Wrocław and plans to launch several similar laboratories in other regions of Poland in the near future.
2. A landmark acquisition and further deals in the pipeline. Alab is in the final stages of integrating CDL, a record-breaking acquisition completed in early 2025. Over the next few years, the company aims to build a large laboratory facility in Łódź. At the same time, it continues to consolidate the sector. It has already acquired several laboratories this year and is currently in negotiations for additional targets. The company estimates that several dozen entities remain to be consolidated in Poland, with combined annual revenues of PLN 500–600 million (approximately EUR 117–140 million). It is also actively exploring acquisition opportunities abroad, primarily to gain access to new technologies, particularly in genetics.
3. Financial barriers to the growth of Polish companies. The founder of Alab argues that Polish businesses face restricted access to financing. In his view, the approach to financing entrepreneurship in Poland has not improved over the past three decades and may have even deteriorated. “Obtaining a bank loan is, to put it mildly, a via dolorosa. If this does not change, Poland’s economic development will be driven by foreign capital and foreign investors, who do not face such financing constraints,” says Dr. Bogusław Gnatowski, founder of Alab Laboratoria.