Corporate: Capitol Health commits $16m to buying South Australian musculoskeletal imaging provider
Diagnostic imaging services provider Capitol Health (ASX:CAJ) will drop a cool $16m to pick up what it calls “South Australia’s leading musculoskeletal imaging centre”.
As part of its plans to expand into Adelaide, Capitol is buying Fowler Simmons Radiology (FSR).
Musculoskeletal imaging is scans of bones, joints and associated soft tissues. This involves X-rays, ultrasounds and MRI scans.
FSR began in 2012 under the late Neil Simmons, who pioneered musculoskeletal ultrasounds in Adelaide in the late 1980s.
Current clinical director and co-founder Shaun Fowler will stay on after the acquisition and has agreed to stay with the company for at least five years.
Fowler and Capitol Health managing director Justin Walter both said the synergy would help the businesses realise each other’s expansion plans.
In the last financial year, FSR booked revenues of $6.4m and earnings of $2.4m. The company’s clients include 4 South Australian National Football League clubs as well as the Adelaide Thunderbirds women’s netball team and Adelaide 36ers men’s basketball team.
Capitol Health shares have been flat since a failed attempt to acquire what was then the only other imaging services provider on the ASX in 2017. However, the company rose a modest 2 per cent this morning.
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A month after Canberra casino operator Aquis Entertainment (ASX:AQS) revealed a takeover offer was on the table, the deal was scrapped. The company said its business was viable and cash positive and it intended to keep things that way.