In a major consolidation of the imaging services segment, Radiology Partners has agreed to acquire the radiology services business of Mednax in a deal valued at $885 million. The acquisition will expand by over 50% the number of radiologists in the Radiology Partners network.
Under the deal, Radiology Partners would acquire the Mednax Radiology Solutions business, adding more than 800 radiologists to the 1,600 radiologists in the Radiology Partners network. Mednax radiologists interpret some 11.8 million medical images annually, and they are primarily located in Connecticut, Florida, Nevada, Tennessee, and Texas. Mednax also employs more than 500 teleradiologists, who serve patients in all 50 states.
The combined entity would sharply expand the national footprint of Radiology Partners and move the company further toward its goal of becoming a nationwide radiology network that can contract with large hospitals and healthcare networks.
The deal comes after Mednax announced in June that it would be putting its radiology services business on the block as part of a restructuring. The company had built the business up over the years through a series of acquisitions, such as teleradiology provider vRad in 2015, as well as a series of smaller radiology groups.
But the acquisition spree also incurred debt that began to weigh heavily on the company, and Mednax announced a review of its operations in 2018 that led to the company beginning to sell off businesses. The COVID-19 pandemic added insult to injury, with radiology procedure volume dropping 50%-60% in its first financial quarter.
For its part, Radiology Partners has grown rapidly since the company was founded in 2012. The firm's goal is to consolidate the market for radiology services -- which has been fragmented by a proliferation of small radiology groups in local markets -- to build a national network that can contract with large healthcare providers and add clinical value for its customers.
The company believes its larger scale can help it create value for customers while also enabling it to reduce costs and offer a greater variety of subspecialized image interpretations for clients.
