Radiation therapy centers sold out of private equity-backed provider’s bankruptcy estate for nearly $3M
A publicly traded healthcare group is buying three radiation therapy centers out of bankruptcy for $2.85 million.
San Francisco-based American Shared Hospital Services announced the deal May 9, with the company acquiring a 60% stake in the businesses. The centers are in Rhode Island and are expected to bring in between $9 million and $10 million in annual revenue, with ASHS also purchasing certain payer contracts.
Private equity-backed GenesisCare USA Inc., which filed for Chapter 11 bankruptcy protection in June 2023, previously operated the clinics. Headquartered in Sydney, Australia, the company broke into the U.S. market in 2020 by buying 21st Century Oncology. But the deal left GenesisCare saddled with debt leading to its financial troubles.
“This is a strong milestone for our company that expands our footprint of owned and operated radiation oncology centers into the U.S.,” Ray Stachowiak, executive chairman of American Shared Hospital Services, said in a statement. “The acquisition adds new revenue streams from each of the three facilities that are accretive to our base and is an excellent use of our capital as we continue to build momentum and execute on our growth strategy.”
Stachowiak and colleagues said the acquisition also will more than double American’s backlog of anticipated revenues, up to $213 million (vs. $106 million in 2021). Contracts at the three Rhode Island centers currently have no termination date, with American anticipating they’ll generate revenue for at least the next 10 years.
All three are equipped with “state of the art” cancer treatment technology, CT simulators and comprehensive planning software. Centers are on or adjacent to the hospital campuses of Care New England and Roger Williams Medical Center—the second and third largest health systems in Rhode Island, with both holding equity in the businesses. The facilities include Southern New England Regional Cancer Centers in Woonsocket and Warwick, along with Roger Williams Radiation Therapy in Providence.
David E. Wazer, MD, professor and chairman of radiation oncology at the Alpert Medical School of Brown University, said the centers likely would have shuttered without a buyer.
“It is very fortunate for Rhode Island cancer patients that ASHS was able to step into the void created by the GenesisCare bankruptcy,” he said in the same announcement from American. “Had ASHS not taken this action, it is very likely that several treatment facilities would have been closed by the end of year, which could have caused severe disruption for the roughly 70 patients per day that receive their care in these facilities. It is not an exaggeration to say that the responsible action by ASHS averted a statewide healthcare emergency.”
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.