Radiology Partners Inc., the nation’s largest radiology practice, exceeded its own expectations by raising $720 million in growth equity investments last month.
Officials with the El Segundo-based company said in January that it was hoping to raise $300 million in new funding, but strong interest from investors pushed the final amount higher.
Radiology Partners said it would retain more than $500 million of the new capital for “continued growth and investment in innovation.”
“We are pleased to have completed the final steps in our comprehensive financing plan, and we are poised to move forward with the resources and flexibility to continue to expand our clinical services and extend our technology and AI capabilities,” said Rich Whitney, board chair and chief executive of Radiology Partners. “The equity raise, which we believe to be the second largest growth financing in the health care industry in the past two years, underscores the strength of our practice, our leadership position in health care and the value we bring to our patients and our client partners.”
Radiology Partners is a physician-owned and -led company that serves more than 3,300 hospital and other health care facilities – including imaging centers and clinics – in the U.S.
“This is an important and exciting day for RP,” said Rod Owen, director of the company’s board. “Continued long-term support from our equity partners and lender partners fuels our mission and our ultimate success. We are moving forward as an even stronger practice, better positioned to continue to transform radiology and serve patients and health care providers.”
The company, while stating that the funding came from new and existing investors, did not disclose any particulars about the sources of the investments.
Officials added that it “meaningfully” reduced the company’s debt and extended the terms of outstanding debt with new maturity dates from 2028 to 2030.
Nina Kottler, associate chief medical officer for clinical AI at Radiology Partners, said, “The future of radiology will be driven by an investment in people, process and advanced technology at scale. The steps Radiology Partners is taking today will enable the practice to continue to make these investments, better serve patients and build on our leadership position as AI plays an increasingly important role in our evolving field.”
Radiology Partners was founded in 2012 by Whitney, a health care industry investor, and veteran industry executive Anthony Gabriel. In July 2019, New York and Nashville, Tennessee-based Star Investment Holdings invested $700 million in the company to help fund organic growth and future acquisitions. In 2020, Radiology Partners acquired Sunrise, Florida-based Mednax Radiology Solutions for about $885 million, and in 2018 it signed a 10-year lease for a Frank Gehry-designed property in El Segundo where it is now headquartered. The lease was worth a reported $33 million.
Kirkland & Ellis LLP and Sidley Austin LLP served as legal counsel to Radiology Partners, and Moelis & Co. LLC and Barclays Capital Inc. served as financial advisors to Radiology Partners. Gibson Dunn LLP and Centerview Partners served as legal and financial advisors to certain Radiology Partners lenders.
