Morrison consortium buys Quadrant’s Qscan

A man about to undergo an MRI scan. Picture: iStock

A Morrison-led consortium has purchased Quadrant Private Equity’s Qscan Radiology Clinics business for a price that takes its value to $735 million, including debt.

Included in the consortium is the New Zealand and Australia-listed infrastructure investor Infratil, which uses Morrison as its manager.

Morrison was first tipped to win the contest by DataRoom on October 13.

Infratil confirmed the acquisition to the market on Monday.

It fought off competition in the final stages by Ramsay Health Care and, earlier, by Permira and Queensland Investment Corporation.

Morrison is expected to target the healthcare sector for further acquisitions in the months ahead and recently hired Mark McArdle, who previously worked for QIC with a focus on the healthcare sector.

It was advised by E&P Corporate Advisory on the transaction.

Infratil raised $NZ300 million of equity in June 2020 which will help to fund the acquisition.

Qscan, advised by Stanton Road Partners and CLSA, describes itself as a leading diagnostic imaging provider, operating at least 70 clinics with more than 100 radiologists and 730 staff.

It generates about $50m of annual earnings before interest, tax, depreciation and amortisation.

Most of its operations are in NSW and Queensland, with a number in regional locations.

Infratil said in a statement to the market that it would own 60 per cent of the business, while the Morrison & Co Growth Fund would own 15 per cent and the remainder owned by doctors and management.

The sale price equates to between 12.7 and 14.1 times its forecasted EBITDA range of $52m to $58m for the 2021 financial year.