US Radiology Specialists takes on $450M in debt to fuel largest transaction in its history
Growing imaging group US Radiology Specialists is taking on $450 million in debt to fuel two practice acquisitions, the largest in its four-year history, Radiology Business has learned.
The new partners include South Jersey Radiology Associates (SJRA), in Voorhees, and Hainesport, New Jersey-based Larchmont Imaging Associates, altogether comprising 65 physicians and 17 centers.
The acquisitions balloon private equity-backed US Radiology Specialists’ roster to more than 350 rads spanning 180 outpatient centers in 15 states and 8 million studies read annually. Leaders said last year that the group plans to continue down its path of rapid growth, hoping to nearly triple revenue, up to $2.7 billion in the next five years.
“SJRA and Larchmont have strong cultures of innovation and clinical excellence, a shared commitment to subspecialty capabilities, and decades-long track records of patient service with patient satisfaction ratings consistently over 98%,” John Perkins, chairman and CEO of USRS, said Friday. “This partnership represents the largest transaction for US Radiology to date and we are excited to welcome SJRA and Larchmont to our team.”
Physicians founded South Jersey Radiology Associates in 1938, and it has since become one of the “leading” imaging providers in South Jersey’s Camden and Gloucester counties. The group employs 41 board-certified specialists, interpreting across 11 clinical locations. Larchmont Imaging Associates, meanwhile, has been around for 50 years and bills itself as the “premier” imaging provider in South Jersey’s Burlington County, employing 24 physicians across six centers.
The two longstanding practices will now combine to form one of the largest radiology providers in the region and US Radiology Specialists’ first foray into the Northeast.
“As a longstanding member of the healthcare community in South Jersey, we are excited about the potential of this partnership to provide our patients and referring physicians with access to a broader pool of subspecialized radiology expertise,” William Muhr, MD, president and CEO of South Jersey Radiology Associates, said Friday. “The commitment to high-quality, high-satisfaction patient care that we share with Larchmont and US Radiology creates an excellent opportunity to keep our practice growing and innovating in the future.”
Moody’s first hinted at the deal in November, revealing US Radiology Specialists was raising $450 million in new debt (coupled with $188 million in rollover equity) to fuel two acquisitions. At the time, credit analysts forecasted the two Jersey groups would contribute $48 million in incremental earnings, before interest, taxes, depreciation and amortization (EBITDA). A USRS spokesman confirmed that South Jersey Radiology Associates and Larchmont Imaging are the practices referenced by Moody’s but declined to disclose specific terms of the deals.
As of November, the investor service said US Radiology Specialists’ obligations totaled $1.24 billion in term loans, due in 2027, alongside a $125 million revolving credit line maturing in 2025. Moody’s estimated that US Radiology Specialists’ debt was seven times its earnings as of Sept. 30 and issued a “stable” outlook for the company in the near term.
Headquartered in Raleigh, North Carolina, private practice Charlotte Radiology and investment firm Welsh, Carson, Anderson & Stowe formed the imaging group in 2018. USRS operates both outpatient imaging centers and provides radiology services, with yearly revenues of $622 million including the two new practice acquisitions (or $1.1 billion when also counting its share of joint venture partnerships).
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.