US Diagnostic plans merger

US Diagnostic has a tentative agreement to merge with International Radiology Group. According to terms of a letter of agreement between the two companies, USD would acquire all of the fully diluted membership units of IRG for 49% of the issued shares of the combined entity, $5 million in cash, $5 million in a five-year subordinated unsecured debenture, and performance-based warrants. The transaction is subject to due diligence and other conditions, including regulatory approval and shareholder consent. If the merger goes through, which could happen in the second quarter of 2001, representatives of IRG will have a majority of the board seats of the combined entity.

US Diagnostic, an independent provider of radiology services, owns, operates, or manages 47 fixed sites in 12 states. IRG and its subsidiary American Imaging Management manage radiology benefits for managed-care organizations covering approximately three million lives.