National outpatient imaging center operator, RadNet, Inc, Los Angeles, has purchased Image Medical Corporation, the parent company of eRAD, Inc., for $10.75 million in cash and promissory notes.
This latest acquisition marks a consolidation trend in the medical imaging business. Earlier this month, Carestream Health announced that it was purchasing Quantum Medical Imaging, and Merge Healthcare recently acquired PACS competitor, Amicas.
RadNet currently operates 191 outpatient imaging centers in the U.S. eRAD, a PACS and medical informatics company based in Greenville, South Carolina, has contracts with over 250 hospitals and teleradiology businesses.
Howard G. Berger, MD, President and CEO of RadNet, explained the reasoning for the purchase its press statement. He said, “Up to this point, our revenue has been earned exclusively through our owned and operated 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. Our industry depends on the reliability and functionality of software systems for proper and efficient management of data. These information systems and productivity tools have been proven cost-savers, and are becoming ubiquitous in the radiology industry. Entering this business creates a new revenue stream for us, positions us to integrate with the ongoing adoption of digital medical records, and greatly enhances our prospects for growth, margin improvement and profitability.”
Berger added that eRAD acquisition would eliminate costs associated with licensing and servicing PACS and RIS software for its outpatient centers. He estimated that without these costs, the company will save $20 million over the next 10 years.
RadNet also announced today that it has appointed its CIO, Ranjan Jayanathan, as General Manager of RadNet’s newly-created Radiology Information Technology division.
As part of this appointment, the company said that would be adding a new software development team to eRAD, which will focus on expanding eRAD’s product portfolio.
(Source: Press Release)