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Medical Diagnostics (MDI) is funneling newly raised equity capitalinto an expansion of its imaging services business. The firm madeearly use of proceeds from an initial public offering to buy outminority interests in two Massachusetts mobile MRI systems
Medical Diagnostics (MDI) is funneling newly raised equity capitalinto an expansion of its imaging services business. The firm madeearly use of proceeds from an initial public offering to buy outminority interests in two Massachusetts mobile MRI systems previouslyheld by equipment vendor Toshiba.
MDI's February IPO was well-received by investors, accordingto CFO Thomas Hennessey. The Burlington, MA, company sold 202,500shares more than the initial offering of 1.35 million shares,raising a total of $12.3 million in funds. The stock is listedon NASDAQ under the symbol MDIX.
MDI bought minority interests held by Toshiba America MRI intwo of MDI's mobile MRI units: Greater Boston Partnership andCentral Massachusetts Partnership. MDI purchased Toshiba's shareof both units for $700,000, Hennessey said. Toshiba took overthese interests two years ago following the purchase of Diasonics'MRI business, he said.
"Toshiba bought this big grab bag from Diasonics, andwe happened to be in it. They told us they were really into theequipment business, and to be part owners of an operation wasnot what they wanted," Hennessey said.
MDI is unique in that it usually operates as a full-service,licensed medical provider. MDI mobile units set their own hoursand bill third-party payers directly. This could have been a factorin the success of the offering, Hennessey said.
"I think it makes the company more attractive, if peopleunderstand how the service operates. It allows us to control theconditions we operate under," he said.
The company manufactures CT and angiographic contrast injectionsystems. It also supplies MRI surface coils to GE Medical Systemsunder an OEM arrangement (SCAN 11/22/89).
Medrad filed preliminary papers for the offering with the Securitiesand Exchange Commission on April 17. The company expects to beginselling shares in June, pending SEC approval of the offering,Howard said.
Medrad will use proceeds from the IPO to support expansionopportunities, including new product development, joint venturesand possible acquisitions, he told SCAN.
Half of the stock involved in the public offering consistsof existing shares.
"It's not a huge amount of money we're raising," hesaid.
Medrad has not yet set a price per share for the stock, Howardsaid.