Otago Daily Times

Infratil after radiology chain Qscan


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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