Akumin's $820M deal gives it a king-size boost in radiology, oncology services

M&A concept - M&A word made with wooden blocks on laptop
According to Akumin, the combined company will offer the "most comprehensive radiology and oncology solutions to patients in the U.S.," operating in 46 states, with more than 1,000 hospital and health system customers, 154 independent outpatient radiology centers and 34 radiation therapy centers. (SB/GettyImages)

Outpatient imaging center operator Akumin is acquiring Alliance HealthCare Services to get a bigger slice of the radiology and oncology services market.

Irvine, California-based Alliance HealthCare Services provides services in oncology and radiology to more than 1,000 hospitals, health systems and physicians' practices in 45 states.

The deal is valued at $820 million and is expected to close in the third quarter, subject to antitrust approval from U.S. regulators.

If the deal is approved, the combined company will generate annual revenue of more than $730 million with adjusted earnings before interest, taxes, depreciation and amortization of $210 million, according to an investor presentation.

Alliance is owned by Tahoe Investment Group, a Chinese financial firm, which acquired the healthcare company for $178 million through two separate transactions in 2016 and 2017 and then took it private, according to Bloomberg. The publication reported back in August that Tahoe was potentially seeking a sale and could fetch upward of $400 million.

Upon closing, Tahoe will transition to a minority ownership position in the newly combined, publicly traded entity.

According to Akumin, the combined company will offer the "most comprehensive radiology and oncology solutions to patients in the U.S.," operating in 46 states, with more than 1,000 hospital and health system customers, 154 independent outpatient radiology centers and 34 radiation therapy centers.

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The combined company expects to employ 4,000 team members serving more than 2 million radiology and oncology patient visits annually.

"The acquisition of Alliance is transformative in a changing healthcare ecosystem that continues to shift toward outpatient, price-transparent, value-based care. There’s no other organization that has the complement of attributes we will offer together as outpatient healthcare services experts, in particular with Alliance’s longstanding hospital and health system relationships and Akumin’s freestanding operational expertise," said Riadh Zine, president and CEO of Akumin, in a statement.

“Alliance brings an over 30-year history of successful radiology and oncology partnerships with hospitals, health systems and physicians; and Akumin has built and continues to grow its premier outpatient imaging practice. Together we will offer patients and customers profound value unlike any other healthcare solutions company," said Rhonda Longmore-Grund, president and CEO of Alliance, in a statement.

Akumin has been on a buying spree this year, acquiring a 34% stake in an unnamed artificial intelligence firm for $4.6 million, Radiology Business reported. The company also acquired six free-standing imaging centers for $39 million.