IDX buys Auckland radiology clinics

AUCKLAND: ASXlisted Integral Diagnostics has secured a New Zealand beachhead, spending $105 million in cash and scrip for four Auckland radiology clinics.

Melbournebased IDX yesterday announced the acquisition of three Auckland businesses operating four radiology clinics that that it said had projected annual earnings before interest, tax, depreciation and amortisation of $13 million to $14 million in the 2019 financial year.

IDX will take on 14 New Zealand radiologists from Specialist Radiology Group, Trinity MRI and Cavendish Radiology, paying $80 million in cash and $25 million in shares, with a fiveyear staged earnout based on the companies’ operations.

Specialist Radiology + MRI was set up by principal consultant Quentin Reeves in 2007 and expanded to Cavendish Dr in Manukau in 2015. Reeves’ interests are the controlling shareholders of SRG and Cavendish, with junior shareholder Alpenglow Australia. Trinity MRI’s biggest shareholder is Maurice Moriarty with about 25%, and the firm’s other radiologists hold smaller stakes.

‘‘Joining the New Zealand clinics with our Australian business will create a significant, bestinclass diagnostic imaging platform in a collegiate transtasman partnership,’’ IDX managing director Ian Kadish said.

‘‘The clinics have a demonstrated track record of achieving strong revenue growth at marketleading profitability and add significant value to IDX.’’

IDX’s ASXlisted shares jumped 7.1% to $A2.795, adding to a 13% gain so far this year.

IDX’s acquisition is at a forward earnings multiple of between 7.5 times and 8.1 times, depending on how the 2019 result plays out. — BusinessDesk