National radiology services and telemedicine provider vRad has announced it has entered into a definitive agreement to be acquired by MEDNAX, a provider of maternal-fetal, newborn, pediatric subspecialty and anesthesia physician services.
The cash transaction is valued at $500 million and expected to be completed during the second quarter of 2015.
“Radiology is a large, fragmented industry with total revenue of roughly $18 billion, and it is evolving rapidly to include teleradiology as an economic and clinical necessity for customers,” said Roger J. Medel, MD, Chief Executive Officer of MEDNAX, in a statement. “We believe the opportunities for organic growth at vRad and for cross-selling between the company’s and MEDNAX’s customer bases are compelling.”
vRad currently has more than 350 board-certified and eligible radiologists in its network and provides radiology coverage to more than 2,100 healthcare facilities. Annual revenues are approximately $185 million.
vRad’s current management team with join MEDNAX as part of the deal, while the company’s headquarters and client support center will remain in Eden Prairie, Minn.
This is a cash transaction, and it is expected to be accretive to earnings, including interest and non-cash amortization expense, according to the companies.