To the delight of its investors, Westwood medical imaging firm RadNet Inc. continued to radiate its East Coast presence this month when it acquired Diagnostic Imaging Group in a cash and stock deal valued at about $65.5 million.

The deal with Diagnostic Imaging, of Hicksville, N.Y., added 17 imaging centers in the New York area to RadNet’s portfolio. The acquisition, for $56.7 million in cash and 1.5 million RadNet shares, was announced Oct. 16 and is expected to boost the firm’s revenue by about $70 million a year.

News of the deal pushed RadNet’s stock up nearly 10 percent last week to close at $6.30 on Oct. 21, making it one of the top gainers on the LABJ Stock Index.

“We are now by far the largest player in Manhattan, Queens and the Bronx,” said RadNet Chief Financial Officer Mark Stolper. “It allows us to have a seamless network to provide patients with their imaging needs both where they work but also when they go home.”

RadNet provides outpatient X-rays, ultrasounds, fluoroscopes and similar medical images. It operated 259 centers at the end of last year.

The company entered the New York market in 2013 and with this month’s acquisition now operates 74 facilities in New York and northern New Jersey.

“We have always believed that in order to be successful in our business, we have to have a strong geographic concentration,” Stolper said. “This acquisition in the New York metropolitan area represents a perfect target area for the company’s strategy.”

The growth should improve its bargaining power with insurers, Juan Molta, an analyst at B. Riley & Co. in West Los Angeles, said in an Oct. 19 research note.

Molta declined further comment, but his note rated RadNet’s stock as a “buy” with a target share price of $11.

“Our investment thesis remains unchanged,” he wrote. “As the largest outpatient radiology service provider in the nation, we believe (RadNet) is well-positioned to continue to grow profitably via accretive acquisitions.”

Indeed, more good news could soon be on its way to RadNet investors.

A larger pool of analysts estimated that RadNet had $36.2 million in earnings before interest, taxes, depreciation and amortization – or 16 cents a share – during its third fiscal quarter ended Sept. 30. Revenue is expected to hover around $195 million.

The estimates top last year’s third-quarter results when Ebitda was $29.7 million, or 10 cents a share, on revenues near $192 million.

Stolper said last quarter’s results will likely be announced early next month, although the official date had not yet been finalized.

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