Imaging services firm Primedex to buy Radiologix

Jul 6, 2006

In a major consolidation of imaging services providers, Primedex Health Systems of Los Angeles has signed a deal to acquire Dallas-based Radiologix for approximately $208 million.

The cash and stock transaction would expand Primedex's market beyond California and would more than double the number of imaging centers under its control, to 132 fixed sites in the U.S. The new network would include 80 imaging centers in California, 32 centers in Maryland, 12 facilities in New York, and a total of eight centers in Florida, Kansas, Colorado, and Minnesota. As of April 30, Primedex owned and operated 62 facilities. The company's annual revenues would increase to approximately $400 million.

Under the agreement, Radiologix shareholders will receive a total of 22.6 million shares of Primedex common stock and $42.9 million in cash. Based on the July 6 closing price of Primedex common stock of $1.75 per share, each Radiologix shareholder would receive $1.84 in cash for each Radiologix share and one share of Primedex common stock, for a total value of $3.59.

If and when the acquisition is complete, Primedex plans to pursue on a national level what it calls "strategies of geographic clustering" of imaging centers, exclusive capitation contracting, and multimodality services.

Primedex also would change its corporate name to Radnet, the name of the entity through which Primedex currently conducts its operations. The company also plans to submit an application for listing on the American Stock Exchange.

The transaction currently is subject to regulatory clearance and Radiologix and Primedex shareholder approval. The deal is expected to close in the second half of this year.

By AuntMinnie.com staff writers
July 7, 2006

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Radiologix issues Medicare cut revenue reduction update, February 9, 2006

Radiologix's financials improve in Q3, November 3, 2005