Health Images buys MedAlliance stock

The imaging services industrycould be taking another big step toward consolidation. HealthImages of Atlanta this month announced that it has made a majorinvestment in MedAlliance, buying $11.2 million worth of the Brentwood,TN, firm's preferred stock.

In announcing the stock purchase, the firms said that they areinvolved in discussions regarding "other business transactions.

While the companies aren't talking about what those transactionsmight be, a merger or acquisition is a real possibility.

This round of talks isn't the first time the two firms have contemplatedcloser ties. Health Images and ImageAmerica, the precursor toMedAlliance, were involved in merger discussions last year, butthose talks ended without bearing fruit (SCAN 7/14/93). ImageAmericachanged its name to MedAlliance earlier this year (SCAN 6/15/94).

The Health Images purchase was a debt-for-equity swap of obligationsMedAlliance owed to a group of creditors, according to PatrickRyan, MedAlliance president and CEO. The Health Images positionconsists of 2.1 million shares of non-voting stock and does notaffect MedAlliance's common stock, he said.

Other companies in the field are looking at consolidation aswell. Last month, imaging services firm Raytel launched a tenderoffer for Medical Diagnostics (MDI). The plot in that story thickenedon Dec. 16, when MDI adopted a stockholders' rights plan and filedsuit in U.S. District Court in Delaware to enjoin Raytel fromproceeding with its tender offer (see story, page 7).