RadNet, which provides fixed-site outpatient diagnostic imaging services through a network of 191 outpatient imaging centers, has executed a definitive agreement to acquire Image Medical, the parent of PACS developer eRAD, for $10.75 million in a combination of cash and promissory notes.

The Los Angeles-based RadNet said it has assembled a new software development team to complement eRAD's product portfolio. eRAD and the newly hired software development team will form a radiology information technology division of RadNet, under the leadership of Ranjan Jayanathan, its chief information officer.

“We currently license PACS, RIS and related solutions from third-parties with significant ongoing costs,” Howard G. Berger, MD, president and CEO of RadNet, who suggested the eRAD purchase would result in cost savings.

The acquisition of eRAD is expected to close by the end of September, RadNet predicted. The Chicago-based Dresner Partners advised eRAD in this transaction.

RadNet also appointed Jayanathan as general manager of RadNet's newly-created radiology information technology division. Jayanathan joined RadNet earlier this year from Voyant Health, a developer of software technologies for orthopedic surgeons, where he was the general manager of its American operations. Prior to Voyant, Jayanathan was a member of the executive management team of Dynamic Imaging, a PACS company. During his nine year tenure at Dynamic Imaging, Jayanathan managed sales, client services and solutions architecture. He also assisted with Dynamic Imaging's sale to GE Healthcare in 2007 and its integration into GE's operations.