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

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

How communications technology can raise the bar on customer service, employee experience
Partner Content
From capturing feedback early to providing messages with a higher rate of cut-through, ...
Advertisement

Related Stories

Available anywhere and everywhere: Lifestyle brand The Somewhere Co. targets global expansion

Available anywhere and everywhere: Lifestyle brand The Somewhere Co. targets global expansion

Despite a difficult few months for everyday wares outfit The Somewh...

G'day space: Australia is "go" for launch

G'day space: Australia is "go" for launch

Just after midnight on Monday 27 June, above the vast wilderness of...

Melbourne homebuilder Langford Jones Homes enters liquidation owing $10m to creditors

Melbourne homebuilder Langford Jones Homes enters liquidation owing $10m to creditors

Customers of Langford Jones Homes have been left in limbo after the...

Insurance Council declares ongoing NSW floods a ‘significant event’

Insurance Council declares ongoing NSW floods a ‘significant event’

The Insurance Council of Australia (ICA) has activated its prelimin...