Private equity-backed I-MED, Australia’s largest imaging provider, enters US with teleradiology acquisition
Private equity-backed I-MED, Australia’s largest diagnostic imaging provider, is entering the U.S. market with the acquisition of San Diego-based teleradiology group StatRad.
I-MED Radiology Network had been searching for a target to expand into North America, seeing parallels with its home market, CEO Shrey Viranna told the Australian Financial Review. Currently, teleradiology accounts for about 10% of I-MED’s revenue, with its physicians handling over 1 million reports each year across 170 hospitals in Australia and New Zealand.
Terms of the deal, which was finalized July 1, were not disclosed. I-MED said it expects to add about $90 million in annual revenue and $20 million in earnings (before interest, taxes, depreciation and amortization) by acquiring the company. Founded in 1995, StatRad bills itself as the second largest telerad provider in the States.
“While the actual U.S. healthcare market and radiology market has some fundamentals that are quite different [than Australia], teleradiology in the U.S. … was very relatable to us,” Viranna, a South African doctor and former McKinsey consultant, told the publication. “Historically, as an Australian-based business, we are mindful that this is our first venture into the U.S. ... we’ve been cautiously prudent,” he added later.
I-MED’s leadership has courted StatRad for the past two years, getting to know its technology and market. Similar to the U.S., Australia has seen growing interest in teleradiology amid an ongoing specialist shortage.
London-headquartered investment firm Permira previously acquired I-MED from Swedish private equity firm EQT in 2018. The PE firm reportedly also is considering selling I-MED, which employs 450 doctors and operates 250 clinics. Viranna declined to discuss specifics of a potential ownership change, the Review reported.
Privately owned by radiologists, StatRad employs 90-plus United States-based physicians performing reads for “hundreds of clients and thousands of patients every day,” according to its website.
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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.