The acquisition, which will give RadNet a new professional services unit, is expected to help hospitals solve challenges with radiology coverage.

RadNet has committed the upfront fee and 5 million shares of its stock. It also plans to pay up to $210 million tied to a 2027 earnings target. The company expects to add between $190 million and $200 million of annual revenue, plus $60 million to $65 million of adjusted EBITDA, in the first year of operation. RadNet forecasts that future top-line growth will exceed 10%.

The takeover expands RadNet into radiology professional services, adding a third operating segment that the company views as complementary to its existing imaging center and digital health businesses. The acquisition is, in part, a response to demand from joint venture partners and other health systems, RadNet said.

“It became clear to us probably about 18 months ago that the inbound calls from hospitals were not about, necessarily, our AI tools, not about joint venturing and outpatient solutions, but how can we help them solve their most critical problem now, and that is radiology interpretations and radiology staffing,” RadNet CEO Howard Berger said on a call with investors about the deal.

Virtually every current and potential joint venture partner that RadNet speaks with sees “the difficulty in attracting and providing enough radiology coverage” as a “choke point” for their organization, Berger said.

RadNet cited evidence that demand for Onrad’s services, which include 24-hour final interpretations, will grow in the coming years. The company expects an aging population, expanded healthcare access and increased adoption of artificial intelligence to increase demand for imaging.

Source link