Australian private equity firm Allegro Funds says it will make a significant investment in Western Australia’s largest diagnostic imaging provider, Perth Radiological Clinic, the latest in a string of deals for the sector.
Australian private equity firm Allegro Funds says it will make a significant investment in Western Australia’s largest diagnostic imaging provider, Perth Radiological Clinic, the latest in a string of deals for the sector.
PRC is Australia’s largest private partner radiology business, currently with around 20 sites and more than 80 doctors, acting as either partners or employed associates.
In late-2017, it said it had 70 radiologists and 600 staff.
Allegro said the business would continue to operate via the exisiting partnership and service entity, and would retain majority ownership by the doctors.
A numerical value of the investment was not disclosed.
The Australian previously reported that PRC was seeking to sell 40 per cent of the $400 million business.
PRC offers a range of radiology services including MRI, CT, US, plain films, interventional procedures and nuclear imaging.
Allegro said the investment in PRC would deliver short-term competitive market payment for services delivered through the partnership structure coupled with a market valued long term equity ownership for the doctors.
It is the fourth investment from Allegro's Fund III, which has $400 million in committed capital from local and international investors.
The fund's other investments include industrial services business Questas, New Zealand footwear retailer Ngahuia and higher education provider Endeavour Learning Group.
Allegro managing director Chester Moynihan said the firm had an existing relationship with PRC through its prior ownership of I-MED Network until 2014, of which PRC was a subsidiary.
“This previous involvement armed us with an understanding of the strength of the business and the growth potential of the sector,” he said.
I-MED, the largest medical imaging provider in Australia, was acquired by Permira funds in January 2018.
I-MED bought out WA's third largest medical imaging provider, InSight Clinical Imaging, in May last year,
Insight was owned by Ashok Kumar, Joe Gauci and Josh Zucal.
PRC chairman Martin Blake said the existing Allegro relationship combined with a unique doctor ownership model were the factors that resulted in the business selecting Allegro as its partner for the next stage of growth.
“We are excited to be working with the Allegro team to drive the next phase of transformation with a partner who understands our business and the opportunities available and where there is complete alignment of interest,” he said.
Allegro was advised on the transaction by MinterEllison, Greenmount, EY and Rothschild.
PRC was advised by PwC and King & Wood Mallesons.
Allegro has more than $1 billion of funds under management with a mandate to invest in midmarket businesses within Australia and New Zealand.
