Los Angeles-based imaging services provider RadNet has entered into a definitive agreement to acquire Image Medical, the parent of PACS firm eRad of Greenville, SC, for $10.8 million in a combination of cash and promissory notes.
The acquisition is expected to close by the end of September and initially will add approximately $5 million in revenue to RadNet on an annual basis.
eRad has approximately 30 employees, including an R&D team of 11 software engineers in Budapest, Hungary. More than 250 hospitals, teleradiology businesses, imaging centers, and physician groups use eRad's technology to distribute, visualize, store, and retrieve digital images from all imaging modalities.
RadNet owns and operates 191 fixed-site outpatient imaging centers in the U.S.
In anticipation of the acquisition's completion, RadNet has assembled a new software development team to complement eRad's product portfolio. eRad and the newly hired software development team will form a radiology information technology division within RadNet, headed by RadNet chief information officer Ranjan Jayanathan as the unit's general manager.
Jayanathan joined RadNet earlier this year after serving as general manager of American operations for Voyant Health of Columbia, MD. The company provides software products for orthopedic surgeons.
In a prepared statement, Howard Berger, MD, president and CEO of RadNet, said RadNet has earned revenues exclusively through its owned and operated imaging facilities. "With today's announcement, we have positioned ourselves to sell products and services to the over 6,000 freestanding imaging centers and the 10,000 imaging operations within community hospitals across the U.S. that we do not own," he added.
Currently, RadNet licenses PACS, RIS, and related technologies from third parties, which can carry with it significant costs. Berger said the company's expenses are projected to increase accordingly with its growth in procedural volume in the coming years.
"We have estimated that the acquisition of eRad and the development of our own workflow solutions could save us more than $20 million over the next 10 years by eliminating the licensing, annual support, and maintenance fees we would otherwise pay to others," Berger said.
Related Reading
eRad wins Texas order, August 25, 2010
eRad completes Mich. install, August 20, 2010
RadNet completes acquisition, August 12, 2010
RadNet adds to sales, net loss grows, August 10, 2010
eRad completes Tenn. PACS install, August 4, 2010
RadNet buys NY and NJ facilities, April 28, 2010
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