Macquarie back in the $3bn competition for I-MED

I-Med is the country’s largest provider of diagnostic imaging. Picture: iStock

Macquarie Asset Management is believed to be back in the competition for the country’s largest radiology company I-MED.

Sources still believe that I-MED earmarked for a $3bn-plus transaction, despite earlier suggestions that MAM’s withdrawal may have been a tactic to gain control of the company at a lower price.

The group has until the middle of December to firm up its bid.

Earlier, it was competing with Bain Capital, which is now out.

DataRoom reported on October 31 that Bain Capital, which had also been looking at TPG Capital’s Asia Pacific biotech company Novotech, a sale process that has now stalled, could be cooling on the opportunity.

MAM had been carrying out due diligence, but had struggled to get a deal to stack up at the asking price of private equity seller Permira, thought to be as high as $3.5bn.

It was due to lob its final bid mid-November after carrying out two weeks of due diligence.

Now there’s chatter an initial public offering for the business may be an option on the table as early as next year if MAM does not come through on a transaction.

I-MED is the largest diagnostic imaging service provider in Australia and its owner, Permira, has placed the business up for sale through investment banks Jefferies Australia and Morgan Stanley.

Private equity firms have been interested in the sector with the hope that the growing use of artificial intelligence can create greater earnings opportunities.

Interested buyers first came forward to Permira with indicative offers before a formal process was launched where parties were allowed to carry out due diligence.

I-MED is understood to be forecast to generate about $250m of earnings before interest, tax, depreciation and amortisation.

Permira purchased I-MED in 2018 for $1.3bn, or 11 times its earnings from EQT.

It has more than 240 clinics across Australia.

The sale comes after Affinity Equity Partners purchased smaller rival Lumus Imaging from Healius for $965m before the auction started.