RadNet acquired three more multimodality facilities on Tuesday, concluding the company’s second acquisition in as many months. The new purchase, Sonix Medical Resources, came from a bankruptcy proceeding in New York.
RadNet acquired three more multimodality facilities on Tuesday, concluding the company's second acquisition in as many months. The new purchase, Sonix Medical Resources, came from a bankruptcy proceeding in New York.
In March, RadNet acquired Truxtun Radiology Medical Group and Health Diagnostics, with facilities in California and New Jersey.
The acquisitions are part of a larger strategy, according to Alan Sheinwald, president of Alliance Advisors, an investor relations firm located in New York.
“RadNet is a publicly traded company so the strategy is to maintain shareholders’ interest and the way to do that is to be the market leader, to have the most free-standing centers in America,” he said.
RadNet is focusing primarily on facilities in California and the Mid-Atlantic states, areas with high populations, he said.
In the latest deal, RadNet paid $2.25 million for Sonix Medical’s three facilities, which currently produce approximately $7 million of combined annual revenues. The facilities located in Brooklyn, New York, Chatham, New Jersey and Haddon Heights, New Jersey operate a combination of MRI, CT, mammography, ultrasound, fluoroscopy, x-ray and related modalities.
“I believe the opportunity to purchase these centers out of a bankruptcy proceeding is the result of the financial and reimbursement pressure our industry is enduring, which is particularly felt by smaller, less-capitalized operators,” said Dr. Howard Berger, president and CEO of Radnet.
While RadNet is quickly acquiring new businesses, the firm is very specific about who it brokers a deal with, Sheinwald said. The company is particularly concerned about purchasing centers with good reputations in their areas.
“I do not see RadNet making a big push into the middle states or North Dakota, South Dakota, that’s not a part of the strategy,” he said.
“RadNet has about 185 centers and it’s looking to achieve $550 million of revenue this year,” Sheinwald said. Increasing size is good for decreasing overhead and it’s the only way to make the economic model workable, he said.