Private equity firm acquiring diagnostic imaging provider for $658M

Private equity firm Affinity Equity Partners is acquiring radiology services provider Lumus Imaging for about $658 million (USD), the two announced Monday. 

St Leonards, Australia-based healthcare company Healius Limited is the seller, unloading the country’s third largest diagnostic imaging provider to the highest bidder. Around for over 30 years, Lumus Imaging operates a network of independent radiologists, employing 2,000 imaging experts and support staff across 150 care sites. 

Hong Kong-headquartered Affinity Partners—which has $14 billion in assets and funds under management—had been seeking an entry into the Australian market. The country’s healthcare sector is attractive to investors, due to it being highly regulated with substantial government funding, PitchBook reported.

“Lumus Imaging is an exceptional business, which aligns to Affinity’s commitment of investing in high-quality companies that have significant growth potential,” Mark Chudek, managing director at Affinity Equity Partners, said in a Sept. 23 announcement. “Healthcare is a key investment area for Affinity, and we aim to support companies with the resources they need to expand, serve more patients and deliver improved services to all stakeholders—including Lumus Imaging’s referrers and hospital clients.”

Healius expects to net transaction proceeds of over $575 million from the deal after paying equipment leases and making other closing adjustments. The company will collect $550 million after accounting for separation costs, transaction fees and other expenses. Healius said the sale price represents about 17x Lumus Imaging’s earnings (before interest, taxes, depreciation and amortization) or 25.4x EBIT. Both sides hope to close the deal in 2025’s first quarter pending regulatory approval and other conditions. 

After unloading the company, Healius plans to focus on its pathology division. Leaders said the Lumus sale will “alleviate balance sheet pressure” while allowing it to focus solely on improving customer service, modernizing labs and investing in digital technologies. Following the sale, Healius expects to have a “significantly improved” balance sheet and lower capital expenditure requirements after paying down debts.  

“The sale will provide Healius with both the resources and time to continue to improve our pathology operations and the scope to return cash to shareholders,” Managing Director and CEO Paul Anderson said in the announcement. “As a clinically driven, large-scale pathology business, Healius delivers critical diagnostic services to millions of Australians each year, and we are excited by the opportunities to grow and improve the business.”

The Lumus Imaging deal comes as Australia’s largest imaging services provider, I-Med Radiology Network, and its private equity owner also eye a sale potentially worth $2 billion. The organization recently entered the U.S., acquiring StatRad, the country’s second largest teleradiology group.