A private equity alternative: Long-term investment firm buys outpatient imaging operator for $400M
An investment firm billing itself as an alternative to private equity or going public has purchased a growing outpatient imaging chain with plans to hold onto it for the long term.
London-based Cranemere Group is acquiring Outpatient Imaging Affiliates in a deal valued at $400 million, PE Hub reported Wednesday citing anonymous sources. Founded in 2000, the Nashville, Tennessee, healthcare group operates 56 centers across 18 markets. Investment firm ICV Partners is the seller, having acquired Outpatient Imaging Affiliates in 2018, growing from 36 locations and more than doubling earnings during the three-year timespan.
“OIA has built an outstanding network of imaging facilities, distinguishing their centers by delivering quality value to healthcare providers and patients,” Ira Moreland, managing director of Miami-based ICV Partners, said in a statement. “Cranemere is an outstanding new home for OIA to continue its pathway for growth,” he added later.
The provider group’s primary business model is to form joint ventures with local providers, investing its own equity into new or existing centers. Health system partners include three-hospital UVA Health in Virginia, 10-hospital MedStar Health in Maryland and 14-hospital Jefferson Health headquartered in Philadelphia. Along with the initial investment, OIA also handles development, management, marketing, billing and collection services in its ventures.
Meanwhile, Cranemere prides itself on avoiding the “pitfalls of short-termism,” the burdens of “excessive leverage” and “distraction of being sold” that come with the PE model. The firm is structured as a holding company and typically buys with the intent to keep its assets permanently. Cranemere also owns Irving, Texas-based Northstar Anesthesia after acquiring a majority stake in 2018.
“We know that health systems with which OIA partners are focused on their mission of protecting and improving the health of their communities with a horizon of decades and generations, not quarters or years,” Cannon King, president and CEO of OIA, said in a statement. “Cranemere has the same time horizon, along with a deep understanding of the healthcare industry and an extensive network of relationships with hospitals and health systems.”
ICV Partners reportedly generated a 6x return on its investment in Outpatient Imaging Affiliates, with Coker Capital handling the sale process, PE Hub reported Wednesday.
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.