29 Apr 2021

Infratil eyes stake in Pacific Radiology, New Zealand's largest diagnostic imaging service

2:27 pm on 29 April 2021

Infrastructure investor Infratil is poised to take a majority stake in the medical diagnostics firm Pacific Radiology.

Jason Boyes.

Infratil chief executive Jason Boyes. Photo: Supplied

The company is looking to acquire between a 50.1 percent and 60 percent stake in the business for up to $350 million.

Pacific Radiology is the country's largest diagnostic imaging service, employing 90 radiologists across 46 clinics in the South Island and lower North Island.

"The Pacific Radiology acquisition, if completed, sits well with Infratil's other high performing, high-quality assets, and builds on its investment last year in Qscan Group, a leading diagnostic imaging business in Australia," Infratil chief executive Jason Boyes said.

He said the business had defensive characteristics, because it was an essential service, and plenty of opportunities for growth as the population continues to age.

The acquisition would be the second healthcare business Infratil had purchased in the past six months, after taking a majority shareholding in the Australian cancer diagnostics firm Qscan, and follows its new strategy to buy businesses in the healthcare sector.

"We also see this as an opportunity to scale Infratil's investment in Qscan Group and create a meaningful Australasian healthcare platform with potential synergies and adjacent opportunities," Boyes said.

Pacific Radiology Group chair Adrian Balasingam said its doctor-shareholders regard Infratil as a capable long-term investor who could add real value as Pacific Radiology continues to grow.

Completion of the deal was conditional on consents being approved by Pacific Radiology to change control of a small number of material contracts.

Infratil was funding the purchase through existing debt facilities.

The company said the proceeds of its sale of Tilt Renewables for about $3 billion would be used to pay down its debt, leaving the company with about $1bn in cash.

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