In the first week of April 2018, five transactions for physician medical practices were announced. That’s a good start to the second quarter, following Q1:18’s deal volume of 35 transactions targeting physicians and their practices.
Two of the April deals were for radiology centers. One was announced by RadNet, Inc. (NASDAQ: RDNT), the largest provider of fixed-site outpatient diagnostic imaging services in the United States with 259 centers currently. It just added five more in and around the Fresno, California metropolitan area.
The targets include Sierra Imaging Associates (one facility), Women’s Imaging Specialists in Healthcare (three facilities) and Valley Metabolic Imaging (one facility). The five centers perform approximately 65,000 imaging procedures annually, are accredited by the American College of Radiology and employ about 25 radiologists. Financial terms were not disclosed.
The second deal caught our attention. Metro Imaging, a five-center radiology practice based in Creve Coeur, Missouri, was acquired by Mercy, a large Catholic health system based in Chesterfield, Missouri. The not-for-profit system includes more than 40 acute care and specialty hospitals, 800 physician practices and outpatient facilities, 44,000 co-workers and 2,100 Mercy Clinic physicians in Arkansas, Kansas, Missouri and Oklahoma.
The acquisition by the health system comes on the heels of a decision by Anthem Inc. (NYSE: ANTM), announced in August 2017, to no longer pay for certain imaging tests at hospital-owned facilities. Metro Imaging locations will continue to operate as a separate organization and will retain the Metro name.