Morrison leading Qscan race

It was thought that Ramsay Health Care and Morrison were the two strongest contenders to buy the operation. Picture: iStock

Morrison & Co is shaping up as the strongest contender to buy the Qscan radiology business from Quadrant Private Equity, according to sources.

It comes as the sales process nears a conclusion.

Earlier, it was thought that Ramsay Health Care and Morrison were the two strongest contenders to buy the operation.

However, DataRoom understands that Morrison is throwing everything at its bid, aided by E&P Corporate Advisory.

Morrison has had a strong appetite for deals in the Australian infrastructure space in the past.

It also has a lower cost of capital than a trade buyer or a private equity firm.

In Australia, its funds own numerous airports, wind farms and properties including student accommodation, among other assets.

However, infrastructure groups are becoming increasingly attracted to the healthcare space and radiology is seen as an attractive asset class.

Expectations are that Qscan will sell for around $700m.

Qscan 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.

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.

Meanwhile, the sales process for Crescent Capital’s Australian Clinical Labs is understood to be down to one buyer — a private equity firm.

The asking price for the business, which is on the market through Bank of America, is understood to be approximately $600m.

Pacific Equity Partners previously looked at the business, but has since walked away.

Partners Group, which looked to buy Healius, is also thought to be uninterested.

A logical opportunity for the buyer of that operation is a roll-up with other smaller pathology operators in the market, including QML Pathology, which is based in Queensland, and Medlab Pathology.