Capitol Health drops $8.1 million on Melbourne radiology network

Capitol Health drops $8.1 million on Melbourne radiology network

Melbourne-based med-tech company Capitol Health (ASX: CAJ) has acquired four new clinics for $8.1 million to extend its reach in Victoria.

The four clinics in metropolitan Melbourne were previously owned by Uniradiology and extend Capitol Health's reach into Carlton.

Uniradiology's network comprises clinics in Frankston, Dandenong, Boronia and Carlton.

Capitol Health currently owns and operates clincs throughout Victoria, Tasmania, and Western Australia.

The company says these four clinics offer a suite radiology services including CT, Xray, Ultrasound, OPG and Mammography.

As part of the transaction, key resources will join the company on completion.

CAJ says the new clinics are expected to contribute $6.3 million in revenue and up to $1.16 million in earnings on an annual basis.

The sale will be completed in the third quarter of FY19 and the new clinics are expected to contribute to Capitol Health's full year result.

Capitol Health managing director Andrew Harrison says the acquisition is highly complementary to the group's existing network.

"This acquisition represents a consolidation and expansion of our existing Victorian network," says Harrison.

"The businesses are highly complementary to Capitol, sharing many of the same referrers and are largely bulk billed in nature."

The acquisitions will be funded from existing cash reserves and debt facilities.

Capitol Health's Victorian expansion follows its recent entrance into the Chinese diagnostic imaging market through a joint venture with CITIC Pharmaceutical to provide consulting and clinic management services to a network of independent imaging clinics to be created by CITIC and Zhouxin across mainland China.

Shares in Capitol Health are down 1.13 per cent to $0.26 per share at 10.51am AEDT.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

REA Group buys full stake in end-to-end property sales interface Realtair

REA Group buys full stake in end-to-end property sales interface Realtair

Realestate.com.au operator REA Group (ASX: REA) has acquired the re...

HESTA to pump $250m into new global fund with Stafford Capital Partners

HESTA to pump $250m into new global fund with Stafford Capital Partners

Strong returns over the past three years from a $200 million global...

Breakthrough Victoria up to the test with $15m investment in Liquid Instruments

Breakthrough Victoria up to the test with $15m investment in Liquid Instruments

A Canberra-born, San Diego-headquartered technology company that re...

Pacific Smiles to extend nib dental offering to all centres

Pacific Smiles to extend nib dental offering to all centres

Takeover target Pacific Smiles (ASX: PSQ) may see its clinics filli...