RadNet Inc. Managing to Augment Acquisition Strategy

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Primedex Health Systems Inc. last year became the nation’s largest operator of medical imaging centers by acquiring a major competitor and changing its name to RadNet Inc. Now the Los Angeles-based owner of more than 140 imaging centers is branching out into managing centers for other owners.


RadNet announced Aug. 31 that a subsidiary that had been managing two centers has agreed to manage Nudic Open MRI of America, a New Jersey-based chain of 20 centers that had gone into foreclosure but is now being operated by a new entity.


RadNet Chief Executive Howard Berger said the deal offers his company a potentially lucrative profit center at facilities that otherwise wouldn’t fit its acquisition strategy.


The Nudic centers are scattered among 12 states and offer only MRI imaging, whereas RadNet facilities generally offer several types of imaging and are geographically clustered for improved synergies. “It’s not that we’re going out looking for these deals, but people who have these kind of distressed assets have been approaching us for our expertise,” Berger said.


RadNet continues to add to its own chain, last week acquiring Valley Imaging Centers, a three-facility chain in Victorville, for $3.3 million plus assumption of $1.2 million in debt. “This acquisition is consistent with our strategy of being the largest outpatient player in our operating markets,” said Berger, noting his company already had one center in the fast-growing San Bernardino County city.


The deal was financed from a recently amended credit facility that RadNet negotiated with GE Healthcare Financial Services. The company boosted its revolving line of credit by $10 million to $55 million, and increased an outstanding term loan by $25 million to a total $250 million.


The improved access to credit should handle RadNet’s acquisition strategy for quite some time. But Berger admitted the financing had less favorable terms than the company had wanted because of the current liquidity crisis. GE was unable to refinance the existing loan on better terms when it had trouble syndicating parts of it on the secondary market.



U.S. HealthWorks Relocates

Valencia will have a new major employer when U.S. HealthWorks Medical Group the largest provider of outpatient occupational health care services in the state and second-largest in the nation officially opens its corporate headquarters there next month.


U.S. HealthWorks already has its billing office in Valencia, where it employs around 200 people, and is in the process of relocating from Alpharetta, Ga. Corporate employees are scheduled to move into a separate headquarters building in late October.


Despite the higher costs of doing business here, moving to California made sense for the company because the state is its biggest market and Southern California is home to many of its 113 centers. It also didn’t hurt that Chief Executive Daniel Crowley, who came on board in 2003 as part of a turnaround effort, also lives here.


The company last month added to its local operations by acquiring CenterPointe Medical Group in Gardena. Terms of the transaction were not disclosed.


In addition to California, the company is focusing on Florida, New Jersey, Texas and Washington as growth areas. Nationwide, U.S. HealthWorks has 2,400 employees, including about 350 affiliated physicians who treat more than more than 10,000 patients each day. Its centers specialize in early return-to-work programs, injury prevention and workplace wellness programs.



Kronos Acquisition

Kronos Optimal Health Co., a Scottsdale, Ariz.-based provider of corporate and individual wellness programs, has acquired Office Workouts Inc., a wellness staffing company based in Agoura Hills.


The Office Workouts name has been changed to Kronos Office Workouts.


“Our company has experienced rapid growth and expansion, particularly in screening and education services,” Andrea Lazar, Kronos chief executive, said in a statement. “Combining Office Workouts’ contracting network with our own network of health professionals increases our outreach capacity tenfold.”


The Office Workouts acquisition includes a network of 4,000 health and wellness contractors across the country as well as a staffing and scheduling data base and several corporate contracts.



Staff reporter Deborah Crowe can be reached at (323) 549-5225, ext. 232, or at

[email protected]

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