Infratil, a New Zealand-based investment firm, has made a conditional agreement to purchase a majority stake in diagnostic imaging service provider Pacific Radiology for up to NZ$350 million (around $252 million).

WHAT IT'S ABOUT

The energy and transport investor is looking to acquire between 50.1-60% of Pacific Radiology's shares. In a press release, Infratil mentioned that "completion of the Pacific Radiology acquisition is conditional on counterparty consents to change of control in relation to a small number of material contracts."

If those consents are given, the deal is expected to close by end of the month.

Pacific Radiology is the country's largest diagnostic imaging company, operating 46 clinics and employing 90 radiologists across New Zealand.

WHY IT MATTERS

According to a statement, Infratil is looking to build a "meaningful Australasian healthcare platform" following this acquisition. Last year, it bought a 56.25% stake in Australian diagnostic imaging provider Qscan Group for A$289.6 million (around $225.6 million).

“When we outlined the company’s strategic direction in February, healthcare was identified as a sector of considerable opportunity," Infratil CEO Jason Boyes said.

THE LARGER TREND

Global companies have aggressively made their ventures into the healthcare sector during the pandemic. Just this year, Microsoft announced its proposed deal to acquire speech tech firm Nuance Communications for nearly $20 billion, a move that will potentially double its total addressable market in the healthcare provider space. A month before, Amazon said it will expand its telehealth services across the US.

ON THE RECORD

"Diagnostic imaging is an essential services industry, offering a combination of defensive characteristics and structural long-term growth. Pacific Radiology is New Zealand’s largest private provider of diagnostic imaging and has a proven track record for delivering long-term growth, both organically and via acquisition," Boyes said.

"The Doctor shareholders in Pacific Radiology are delighted to partner with such a capable long-term investor as Infratil, who will add real value as Pacific Radiology continues to grow and expand our high-quality services to patients, referrers and funders across New Zealand,” shared Dr. Adrian Balasingam, Chairman of Pacific Radiology Group.