Permira bulks up I-MED Radiology with view to an exit

I-MED is Australia’s largest medical imaging network with more than 240 clinics in metro, regional and rural areas throughout the country.

Private equity firm Permira appears to be bulking up Australia’s largest imaging network, I-MED Radiology, before staging an exit, with the group said to be in talks to buy Canopy Cancer.

Final bids are due this week for the New Zealand cancer care provider Canopy Cancer, up for sale through investment bank UBS and owned by Waterman Private Equity.

The business generates about $25m of earnings before interest, tax, depreciation and amortisation and comprises 19 diagnostic clinics and five oncology clinics.

It is the largest North Island diagnostic provider and the largest private New Zealand medical oncology provider.

Expectations are that I-MED’s owner Permira will place I-MED up for sale next year.

Although the group remains in the sales process for Canopy Cancer, it is not clear how serious its intentions are when it comes to an acquisition. Crescent Capital also earlier looked at the business, but dropped away.

DataRoom understands that I-MED has held informal meetings this year with core-plus infrastructure investors.

Investment bank Morgan Stanley is known to be close to the group.

Permira purchased I-MED in 2018 for $1.3bn, or 11 times its earnings. I-MED is Australia’s largest medical imaging network with more than 240 clinics in metro, regional and rural areas throughout the country.

With the top radiologists owning shares in the business, their interests are aligned with the majority owners.

Market analysts suspect that I-MED could sell for about 14 times its earnings.

Permira’s I-MED was the underbidder in the contest for the largest primary diagnostic image service provider in New Zealand, Pacific Radiology Group, earlier this year.