RadNet buys Sonix Medical Resources out of bankruptcy

April 29, 2010

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.