Permira’s $3bn-plus I-MED sale reaches pivotal point

I-MED is Australia’s largest provider of diagnostic imaging.

This week is crunch time for the I-MED auction after suitors came forward late last week with indications on what they would be prepared to pay for the country’s largest diagnostic imaging provider.

The understanding is that if the offers do not satisfy Permira’s owner, it would call off plans for a sale.

However, DataRoom understands that’s certainly not going to be the case as some groups are showing strong interest for the business that Permira hopes to sell for at least $3bn.

It is believed that parties which come up with the right sort of offer will be let into a process that is not exclusive.

So far, it’s widely known that advisers Jefferies Australia and Morgan Stanley have sent out a flyer promoting the business for sale and the plan had been to offer confidential information to parties interested in acquiring the business – but no formal sale process had been launched.

As reported by DataRoom last week, TPG Capital and Pacific Equity Partners, which both missed out on buying Healius’s Lumus Imaging business to Affinity Equity Partners, are looking at I-MED.

Some market observers believe it’s not inconceivable that they partner together for an acquisition, given that both already jointly own pharmaceutical business iNova.

Also keen buyers are Macquarie Asset Management and Bain Capital.

Last month, PEP, TPG Capital and Affinity Equity Partners all lobbed final offers for Lumus Imaging, which Healius had placed on the market through UBS to pay down debt.

The expectations were that Healius would secure at least $700m from one of the three bidders, but the $965m that Affinity paid surprised Healius shareholders on the upside, causing the stock to rally on the announcement of the news.

Healius in a statement said the transaction price equated to 17 times earnings before interest, tax, depreciation and amortisation, and many in the market say it would be a huge result if the larger I-MED achieved this multiple given its share size.

Lumus Imaging is the nation’s third-largest diagnostic imaging operation behind Sonic and I-MED.

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.