DIS will become California-based powerhouseMedical Imaging Centers of America has found a corporate partnerin the form of Diagnostic Imaging Services to help it settle ashareholder dispute that erupted earlier this year. MICA and DISannounced on
Medical Imaging Centers of America has found a corporate partnerin the form of Diagnostic Imaging Services to help it settle ashareholder dispute that erupted earlier this year. MICA and DISannounced on June 18 that they have signed a letter of intentcalling for DIS to acquire 2.7 million MICA shares for $11.50a share in a transaction valued at $31 million.
San Diego-based MICA in January became embroiled in a bitterbattle between company management and a dissident shareholdergroup, Steel Partners, that held almost 20% of MICA's stock (SCAN1/17/96). The conflict was settled after MICA's management agreedto search for a corporate partner that would either acquire ormerge with MICA.
Like MICA, Diagnostic Imaging Services is a California imagingcenter firm with an eye on expansion. The Los Angeles companyruns 10 imaging centers in the Los Angeles and San Diego areas,as well as 15 ultrasound units. The company recently completeda deal with Primedex Health Systems in which Primedex bought a53% stake in DIS (SCAN 6/5/96). Primedex runs 19 imaging centersin California through its RadNet subsidiary.
DIS will thus control 46 imaging centers and one radiationoncology center if the MICA deal goes through, giving it a dominantposition in Southern California. DIS spokesperson Brad Wolk saidMICA's strong position in Orange County, where DIS is not a player,was one of the factors in the company's decision to pursue anacquisition.
"We are hoping to increase our market share in the area,"Wolk said. "The synergies involved in both companies willproduce a network that won't be matched by some of our competitors."
MICA also will bring DIS nine centers outside California, particularlyin Florida, giving DIS a position outside California for the firsttime.
MICA agreed to the DIS proposal because it offered the bestvalue for shareholders, according to chairman and CEO Robert Muehlberg.The offer by DIS represents a premium of at least $1 a share overMICA's average trading price in recent weeks, and is almost doublethe average price of $6 a share that Steel Partners paid for itsstock.
"The share price that (DIS) offered and the fact thatit was cash gives our shareholders the greatest value," Muehlbergsaid. "I have not spoken to Steel Partners, but I would imaginethat they ought to be very happy with the offer that is on thetable because of (the price) they bought their stock at."
Whether MICA executives will be offered positions with DISis still under negotiation, Muehlberg said. Steel Partners representativeswere unavailable to comment on the acquisition proposal as ofpress time.