US Radiology Specialists plots double-digit growth, fueled by M&A, after ‘extremely challenging’ 2020
US Radiology Specialists is eyeing double-digit growth in the new year following an “extremely challenging” 2020, according to recently published reports.
The Raleigh, North Carolina-based practice plans to add more than 1,000 positions in the next 12 months, fueled by mergers, acquisitions and organic expansion. Just last week, USRS made its first foray into New York state by partnering with five-location Windsong Radiology group.
COVID-19 has challenged the operator, dragging imaging volumes down by 56% at the low point in April, CEO John Perkins told the Triangle Business Journal Friday. But the numbers have recovered since and leaders are now strategizing ways to expand in the coming months.
“Needless to say, COVID will continue to be a force for the foreseeable future. We have emerged as a closer team and a stronger business that is even better positioned for future growth,” Perkins told the publication.
“Of course, we will continue to be vigilant with our protocols to ensure a COVID safe environment for our patients, employees and partner radiologists,” he added later. “We also recognize that we need to be responsive as the environment changes. Right now, we continue to be on offense, but we will adapt to the situation as necessary.”
Private practice Charlotte Radiology first formed the company back in 2018 with healthcare investment firm Welsh, Carson, Anderson & Stowe. Since then, the firm has grown through a series of deals to now include 145 imaging centers across 14 states.
In an analysis published Dec. 3, Standard & Poor’s Global Ratings noted that USRS is taking on loans to finance three “near-term” acquisitions. Those include $100 million in revolving credit due 2025; $790 million in term loans due 2027; and $135 million more to refinance existing debts.
S&P issued a “positive outlook” for the provider, believing USRS could sustain an adjusted ratio of free operating cash flow to debt of 3%, “if acquisition activity is moderate.” However, the ratings agency did express reservations, given several other factors.
“The company's rating is constrained by its narrow focus on imaging and radiology services, relatively small scale in a very fragmented market, exposure to adverse reimbursement changes, geographical concentration in three states, [and] limited history under its current ownership,” the analysis noted.
In a statement shared Friday, US Radiology Specialists challenged parts of the report, while noting that its practice has grown “over 6x” since its inception three years ago.
“S&P has a specific construct for its credit ratings and while we are encouraged that S&P recognizes the positive outlook for our company, we don’t believe its methodology completely and accurately reflects some aspects of US Radiology or the radiology industry,” a USRS spokesman told Radiology Business. “With that said, we are excited about the prospect of securing additional financing to drive our continued growth.”
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.