Private equity-backed US Radiology Specialists hopes to hit $2.7B in revenue in next 5 years
Growing imaging group U.S. Radiology Specialists hopes to hit $2.7 billion in revenue in the next five years, its top executive said Thursday.
Founded by Charlotte Radiology and private equity firm Welsh, Carson, Anderson & Stowe, the firm has used debt to fuel expansion through several recent acquisitions. Chairman and CEO John Perkins said he plans to continue the torrid pace, potentially tripling earnings and revenue by the mid 2020s.
“We want to be the partner of choice for radiologists, outpatient imaging operators and health systems and fuel the growth of our network through M&A,” Perkins told the Triangle Business Journal in an interview published Sept. 30. “If we continue to do these things well, we will achieve both our short-term and long-term financial goals.”
As of June, U.S. Radiology Specialists operated 145 outpatient imaging centers across 14 states. Perkins pegged the practice’s current earnings (before interest, taxes, depreciation and amortization) at $200 million, up from $20 million at its start, on $1 billion in revenue (up from $130 million). If all goes as anticipated, Perkins expects those numbers to hit $600 million and $2.7 billion by 2026 or so. For perspective, two of the industry’s biggest players, RadNet and Radiology Partners, are expecting to log revenue of $1.325 billion and $2.3 billion, respectively, in 2021.
Back in February, Moody’s Investors Service warned of potential “execution risk” in its expansion plans, citing high debt leverage and modest scale. But on the plus side, U.S. Radiology Specialists boasts strong competitive positioning and business diversity, offering both outpatient imaging and radiology physician services in an integrated manner in many markets.
Perkins said the macro dynamics of the specialty are “very solid,” while highlighting radiologist recruitment as one of the industry’s biggest challenges, exacerbated by the burnout crisis. He believes balancing the needs of patients and private equity is possible.
“The idiom ‘doing well by doing good’ rings true to me as a healthcare CEO,” Perkins told the Triangle Business Journal. “I firmly believe that a for-profit business can positively impact the lives of patients and team members and also generate a strong return for shareholders.”
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.