Alliance buy builds southern base

April 22, 1992

Mobile imaging provider Alliance Imaging added seven southeasternstates to its territory last month through the acquisition ofAtlantic/Gulf Imaging of Macon, GA. The $12.3 million transactionwas 95% funded with Alliance stock. Atlantic/Gulf adds nine

Mobile imaging provider Alliance Imaging added seven southeasternstates to its territory last month through the acquisition ofAtlantic/Gulf Imaging of Macon, GA. The $12.3 million transactionwas 95% funded with Alliance stock.

Atlantic/Gulf adds nine mobile and one transportable MRI unitsto the La Palma, CA, firm's existing fleet of 57 MRI and six CTsystems.

"It's a very good fit for us, providing us with a regionwe wanted," said Vincent Pino, executive vice president.

The acquisition brings to 25 the number of states in whichAlliance competes, adding North and South Carolina, Tennessee,Florida, Alabama, Georgia and Mississippi. The only geographicoverlap for the two firms is Louisiana, Pino said.

Alliance's existing swathe of territory stretches across themiddle of the country from California to New Jersey and Delaware,he said.

Atlantic/Gulf will continue to operate out of Macon, as a whollyowned subsidiary of Alliance, Pino said. Neil Cullinan will remainas president and Dr. Joe Sam Robinson, a major Atlantic/Gulf shareholder,has been nominated to sit on Alliance's board.

A mostly physician-owned firm, Atlantic/Gulf had 1991 revenuesof $8.5 million and earnings of $848,000 before taxes.

Despite cost pressures in mobile MRI services, Alliance hada solid fiscal 1991 (end-December). Revenues rose 12%, from $46.4million in 1990 to $52 million last year. Net income skyrocketed84%, from $721,000 in 1990 to $1.3 million (see graph).

The company, which went public last November, said the figuresreflect the addition of nine MRI units in 1991. Alliance alsoadded five new MRI systems in the first quarter of 1992, priorto the Atlantic/Gulf purchase.

Pino attributed much of Alliance's success to its network ofregional offices, which keep in close contact with customer needs.Additionally, company managers own stock and have incentives tokeep costs down and profitability up, he said.

Alliance is actively seeking to enter the imaging center sideof the service business in the light of federal safe harbor restrictionson referring-physician ownership of medical facilities. The firmhopes to acquire two or three imaging centers by year's end andadd another 10 MRI mobile units in new contracts with hospitals,Pino said.

Although Alliance does not yet own any centers per se, 18 ofthe firm's MRI systems are stationary mobile units that servicea single hospital, he said.