RadNet, Inc. agreed to acquire ONRAD, Inc., extending its imaging business into hospitals and adding radiology staffing and remote image interpretation as a new reportable segment.
At completion, ONRAD shareholders are slated to receive $350 million in cash plus five million RadNet common shares, subject to customary adjustments. An additional payment, capped at $210 million, depends on ONRAD's performance against a 2027 EBITDA threshold. RadNet may deliver that amount in cash, shares or both. The company has not disclosed the threshold or valued the share portion.
RadNet is targeting completion in early 2027, pending regulatory review and other closing conditions. It plans for ONRAD to anchor a third reportable segment, Radiology Professional Services.
RadNet said ONRAD has more than 130 contracted radiologists and provides services to over 225 hospital facilities across 26 states. Its work includes remote image interpretation and hospital staffing, including interventional radiology.
For ONRAD's first year of operation after closing, RadNet projects revenue of $190 million to $200 million and Adjusted EBITDA of $60 million to $65 million. RadNet identifies Adjusted EBITDA as a non-GAAP measure. It said it could not predict with reasonable certainty how non-GAAP adjustments would affect the forecast relative to generally accepted accounting principles, so it did not provide a reconciliation, which would require unreasonable effort.
RadNet says the deal would connect its outpatient imaging and DeepHealth digital health operations with ONRAD's remote and hospital services. The company says growth in U.S. imaging demand exceeds the available supply of trained radiologists. It also cited a Signify analysis finding that hospitals and health systems account for more than half of U.S. diagnostic imaging volume.
RadNet would fund the cash payment and issue shares to ONRAD shareholders, and could owe the contingent payment as well. The company cited integration risks and costs, along with possible effects on its debt, leverage, credit ratings and liquidity. RadNet scheduled a conference call and webcast for 8 a.m. ET Tuesday, Oct. 27.
