Buffalo’s 2nd largest diagnostic imaging center operator on why it sold to private equity

The Buffalo, New York, area’s second largest diagnostic imaging center operator elaborated on why it decided to sell to private equity in an interview published Tuesday.

Founded in 1959, Southtowns Radiology announced in November that it was unloading its imaging center business to Rezolut. Adding the three centers ballooned the Atlanta-based private equity platform company’s total to 43 at the time, including 19 in the Northeast.

Leaders discussed the decision in an interview with Buffalo Business First.

“The benefits and challenges of running an imaging center really caused our doctors to take a step back,” said Dan Strauch, director of operations at Southtowns Radiology and COO at SRA Medical Imaging LLC. “The other part is there is a lot of activity from private equity groups like Rezolut out there. You don’t want to miss an opportunity if there’s someone who is interested.”

Under terms of the deal, the physician owners who sold the business continue running the three sites. They do so via an agreement with SRA Medical Imaging, which also provides contract services to Catholic Health and Niagara Falls Memorial Medical Center.

Southtowns Radiology saw nearly 500,000 patients last year, making it the second largest imaging center operator in the area. Great Lakes Medical Imaging landed first with nearly 646,000 patient encounters in 2023, according to the publication.

The practice was the second major radiology player in the area to sell to private equity after Windsong Radiology inked a partnership with US Radiology Specialists in late 2020.

The article does not discuss some of the potential downsides of selling to private equity, which can include higher productivity requirements, decreased physician autonomy and increased burnout.

Read the rest of the interview here: