Qscan Christmas present for healthcare-seeking private equity

Quadrant Private Equity’s Qscan Radiology business could be on the market by Christmas with the buyout fund currently in the process of selecting an adviser for a possible sale of the operation.

It comes as the Australian private equity group moves to place its tourism operation Journey Beyond on the market next year.

Quadrant invested in Qscan in June 2017, along with North Coast Radiology, reportedly valuing the operations at $200m and a sale this year is now understood to be on the agenda. The buyout fund is known to be currently speaking with banks for what is thought to be a plan to shortly start a sale process.

Some have pointed to Morgan Stanley and PwC as groups that will be working on the business, although no formal appointment has yet been made. Morgan Stanley advised private equity firm EQT on the sale of I-Med to Permira for $1.3bn in 2018. The company was sold to Permira after a sales process where Asian groups were vying for the business.

After starting in 2006 with one clinic, Qscan now operates in 21 locations and the group has expanded recently with the acquisition of the radiology business Alpenglow Australia.

Alpenglow controls 11 sites through NSW and five in Queensland, offering services to regional and rural communities.

Before the acquisition, Qscan has been operating 33 clinics with 40 radiologists, treating 500,000 patients annually. The business will no doubt prove highly attractive at a time when private equity is eager to buy healthcare businesses and limited opportunities remain in the market. Qscan sits within Quadrant’s $980m number five fund, which also includes the businesses Fitness and Lifestyle Group, Journey Beyond tourism business, Peter Warren Automotive, TEEG education and entertainment company, private wealth business Fitzpatricks and services business APM.

Meanwhile, its Journey Beyond business is expected to hit the market next year. Journey Beyond was formed when Quadrant purchased Great Southern Rail and later the Cruise Whitsundays and Rottnest Express marine tourism businesses.