Radnet Inc. has operated medical imaging centers in California, Florida and New Jersey. Now, it’s going to Qatar.
“The incidence of breast cancer in that country is close to four times more frequent than in the U.S.,” said Mark Stolper, chief financial officer of the Westwood company.
Because no Qatari culture for screening existed, Stolper said the government solicited bids from international businesses to operate a national diagnostic program. RadNet, which partnered with an equipment manufacturer and a Qatari company, won the contract.
“This is the first time we’ve been able to take our core competencies and expertise and export to a different country,” Stolper said.
The five-year contract calls for RadNet to supervise screening center construction, staffing and training as well as consultation with radiologists.
Though Stolper declined to specify the value of the deal, Darren Lehrich of Deutsche Bank wrote in a research note that RadNet will see revenue of $2 million to $4 million a year over the life of the contract.
“Qatar has a population of (about) 2 million, and the health care system is tightly coordinated by government-sponsored entities but has historically been poorly organized with regard to women’s cancer screening,” Lehrich wrote. “This represents a small, but new and high-margin revenue stream.”
Stolper said that while a breast exam in the United States is, clinically speaking, no different from one in Qatar, the challenge will be changing the culture surrounding exams and making women feel comfortable and knowledgeable about coming in for screening.
He said RadNet hopes the Qatar deal will also be a “test bed” for doing similar deals in other countries in regions such as South America.
“Our core business tends to be capital intensive,” Stolper said. “In this case, it’s not a major capital investment. It’s a capital-light way of building our business.”
Blue Wolf or Bust?
After Prime Healthcare Services pulled the plug on its $843 million bid for Daughters of Charity Health System’s ailing hospitals last week, previous contender Blue Wolf Capital remained cautiously optimistic.
“Blue Wolf Capital has followed developments at the Daughters of Charity Health System closely,” the New York private equity firm wrote in a statement emailed to the Business Journal. “We remain strongly interested in playing any constructive role that utilizes our investment capital and health care and restructuring expertise to resolve the challenges facing the system and create a stable health care provider for the communities and workers who rely on these vital safety-net institutions.”
A spokeswoman declined further comment.
The company, which specializes in deals involving organized labor, was championed by Service Employees International Union-United Healthcare Workers West and United Nurses Associations of California/Union of Health Care Professionals.
SEIU-UHW President Dave Regan said earlier this year that Blue Wolf’s bid included $300 million in capital improvements – twice as much as Prime – and collective-bargaining understandings with two of the major unions at Daughters of Charity’s hospitals.
The firm had proposed what amounted to a $24 million-a-year management agreement with the hospital system with an option to acquire the assets later, according to Daughters of Charity board documents. Blue Wolf wanted to enlist two experienced health care executives, Dr. Richard Becker, who turned around the Brooklyn Hospital Center in New York, and Dick Wright, who led the acquisition of multiple hospitals and medical centers in California for Universal Health Services Inc.
Daughters of Charity’s board meeting minutes noted that Blue Wolf wouldn’t disclose further details about its turnaround plan and that, because the firm wasn’t proposing a purchase of the health system, it wasn’t really an offer.
Whatever the Catholic organization decides to do with its six California hospitals, including two in Los Angeles County, it needs to act fast. The health system has been losing $10 million a month and is flirting with bankruptcy.
Medbox Inc. announced that it would amend and restate its financials for 2012, 2013 and the first three quarters of 2014 by the end of this month. The West Hollywood marijuana-dispensing company said it overstated 2013 revenue by $3 million to $3.2 million due to premature revenue recognition on some customer contracts.
John Raffoul has been named chief executive of White Memorial Medical Center, more than 26 years after starting at the hospital as an accountant. … Mael Disa-Vingataramin has been named president of OriginOil Inc.’s new algae division. ... Anita J. Chawla has joined CytRx Corp.’s board of directors. … Clifford Shiepe, chief administrative officer for To Help Everyone Health and Wellness Centers, has been named interim chief executive of the organization after the death of Rise K. Phillips. … Ozzie Martinez has been named chief administrative officer of Kaiser Permanente South Bay Medical Center. … Dr. Larry W. Kwak will become director of City of Hope’s Toni Stephenson Lymphoma Center next month.
Staff reporter Marni Usheroff can be reached at firstname.lastname@example.org or (323) 549-5225, ext. 229.
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