Otago Daily Times

In­fratil after ra­di­ol­ogy chain Qs­can

- CHRIS KEALL Business · Australia News · Investing · Private Equity · New South Wales · Queensland · Australia · New Zealand · Air New Zealand · Ontario · Infratil · New Zealand Exchange · Healthscope

THE ac­qui­si­tion­hun­gry In­fratil has placed a $A700 mil­lion ($NZ712 mil­lion) bid for Aus­tralian ra­di­ol­ogy chain Qs­can.

‘‘The dis­cus­sions are on­go­ing and in­com­plete and may not re­sult in a trans­ac­tion oc­cur­ring,’’ the com­pany said in a state­ment to the NZX.

In­fratil has placed a higher bid than other con­tenders, said the

Aus­tralian Fi­nan­cial Re­view.

In­fratil raised $300 mil­lion in June 2020 to po­si­tion it­self to pur­sue its growth agenda and take ad­van­tage of any other in­vest­ment op­por­tu­ni­ties that may arise.

‘‘The pro­ceeds of the eq­uity raise were ini­tially ap­plied to re­duce drawn bank fa­cil­i­ties,’’ the com­pany said.

‘‘Those ex­ist­ing bank fa­cil­i­ties could now be ap­plied to fund the Qs­can ac­qui­si­tion if it oc­curs, so no ad­di­tional fund­ing would be re­quired.’’

Qs­can, owned by Quad­rant Pri­vate Eq­uity, op­er­ates around 70 clin­ics. Most of its op­er­a­tions are in NSW and Queens­land, with some in re­gional lo­ca­tions that are said to be strug­gling to hire skilled staff. It em­ploys around 730, in­clud­ing around 100 ra­di­ol­o­gists.

A sec­ond re­port, in The Aus­tralian, says prospec­tive buy­ers are be­ing told that the com­pany gen­er­ates about $A50 mil­lion of an­nual earn­ings be­fore interest, tax, de­pre­ci­a­tion and amor­ti­sa­tion, which could in­crease to $A80 mil­lion and then $A90 mil­lion in the next two years.

Qs­can could ap­peal to a buyer keen to roll up other di­ag­nos­tic imag­ing providers, such as the listed groups Capi­tol Health and In­te­gral Di­ag­nos­tics, to cre­ate a far larger busi­ness, ac­cord­ing to

The Aus­tralian’s Data­room.

Ra­di­ol­ogy providers used to sell for be­tween eight and 10 times earn­ings, but ex­pec­ta­tions are now be­tween 10 and 12 times, it says — or around $A700 mil­lion, based on for­ward earn­ings. Quad­rant in­vested in Qs­can in June 2017, along with North Coast Ra­di­ol­ogy, in a $A200 mil­lion deal that, at the time, in­volved 33 clin­ics with 40 ra­di­ol­o­gists.

Bid­ding is said to have closed on Thurs­day.

If it does suc­ceed, it will be sec­ond time lucky for In­fratil to break into the health­care sec­tor.

The com­pany is said to have nar­rowly missed out when Aus­tralia’s Health­scope off­loaded its New Zealand pathol­ogy as­sets in Au­gust — which were scooped up by the NZ Su­per Fund and the On­tario Teach­ers Pen­sion Plan Board in a $550 mil­lion deal. —

The New Zealand Her­ald

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