London investment firm acquiring radiology vendor Intelerad for $500M-plus
A London-based investment firm is acquiring the majority stake in imaging software provider Intelerad, the parties announced Jan. 23.
Hg Capital is spending between $500 and $550 million on the Montreal, Quebec, technology firm, which provides electronic tools to help radiologists view images, report their findings and collaborate with peers. It hopes to close the transaction by the end of March, pending regulatory approval, company officials said Thursday.
Hg said it plans to make another roughly $126 million in funds available to Intelerad for future use, according to a company announcement. Intelerad CEO Paul Lepage said the company will target further growth with the funds, investing in areas such as zero-footprint technology, and the integration of AI into diagnostic and screening workflows.
"We were looking for a partner where there was, first of all, a good cultural fit, and that was going to help us achieve these stated outcomes," Lepage, CEO since 2018, told Radiology Business. "Hg was a good fit for this because of their health technology investment focus, their deep expertise in B2B software and healthcare, a strong portfolio support team and a truly global reach."
To date, the London investment firm has poured about $1 billion into the healthcare technology space, in five firms total. Those include Rhapsody + Corepoint, which focuses on healthcare interoperability, along with workforce and risk management firm Allocate Software.
Intelerad was first founded in 1999 and acquired by Canadian investment firm Novacap in 2016, which is now selling its majority stake to Hg but remaining as a minority shareholder. In its own announcement, Novacap touted Intelerad’s rapid growth over the past four years, doubling revenue and ballooning its employee base by 44%, up to 400, working in the U.S., U.K. and Australia. Intelerad now serves more than 300 imaging centers, clinics, radiology practices and hospital-based diagnostic departments, which have been a particular area of growth in recent years, officials noted.
Last year, Intelerad said it was investing another $75 million to develop new artificial intelligence and cloud-based offerings, Radiology Business reported previously. An unconfirmed report this week pegged the Canadian software firm’s value at about $650 million following Hg’s investment.
Lepage added that he does not anticipate any wholesale changes at the firm after the deal closes this quarter.
"It is business as usual for Intelerad," he told Radiology Business. "Our head office remains in Montreal, there are no planned changes to the management or employee structure, and our product roadmap remains the same."
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.