Energy and transport infrastructure investor, Infratil, plans on boosting its presence in the radiology sector after it announced it plans to acquire between 50.1% and 60% of Pacific Radiology Group Limited, a comprehensive Diagnostic Imaging business in New Zealand, from existing Doctor shareholders, for up to NZ$350 million.
Pacific Radiology is the largest private diagnostic imaging service provider in New Zealand, operating 46 clinics in the South Island and lower North Island and employing 90 radiologists throughout New Zealand.
The acquisition, combined with a scaling up of investment in diagnostic firm Qscan Group, will allow Infratil to build its own healthcare platform in Australia, a sector it sees as having “considerable opportunity”.
Completion of the Pacific Radiology acquisition is conditional on various due diligence milestones and completion is expected by 31 May 2021.
Upon completion, the existing Doctor shareholders and Management will hold between 40% and 49.9% of Pacific Radiology. As the majority investor, Infratil will have governance rights consistent with its shareholding and, together with the doctor shareholders, will be able to drive the continued development and growth of the business.
The acquisition Enterprise Value of NZ$867 million implies an EV/EBITDA multiple of 12.6-13.3x and is subject to usual completion adjustments for net debt, net working capital and capital expenditure.
Infratil CEO Jason Boyes said, “the Pacific Radiology acquisition if completed, sits well with Infratil’s other high performing, high-quality assets, and builds on its investment last year in Qscan Group, a leading diagnostic imaging business in Australia. Diagnostic imaging is an essential services industry, offering a combination of defensive characteristics and structural long-term growth. Pacific Radiology is New Zealand’s largest private provider of diagnostic imaging and has a proven track record for delivering long-term growth, both organically and via acquisition. The purchase also confirms our continuing confidence in the New Zealand market and the thematics which are driving our capital allocation in communications and digital infrastructure, decarbonisation, and aging populations”.