Lumus Imaging Raises Debt for Acquisitions
What happened
Lumus Imaging, owned by Affinity Equity Partners, is increasing its debt facilities to fund further acquisitions and expansion. The move follows a reported 40% jump in earnings, indicating strong performance and continued private equity interest in scaling up diagnostic imaging platforms.
Why it matters
- The broader diagnostic imaging market is experiencing a significant shift, with roughly 40% of all imaging volumes now occurring in outpatient centers instead of hospitals. This migration is driven by the lower costs and increased convenience offered by community-based settings. Projections indicate that advanced outpatient imaging will grow by 13-14% over the next decade. - Private equity continues to drive consolidation in the fragmented imaging market; between 2013 and 2023, private equity firms acquired 151 radiology practices. This has resulted in 12% of all radiologists in the U.S. being employed by private equity-backed companies. This trend is fueled by the potential for economies of scale and increased negotiating power with payers. - For the half-year ending December 31, 2024, Lumus Imaging reported a 13.3% increase in gross revenue to $286.5 million and a 50% jump in EBIT to $26.4 million. This growth was attributed to higher organic volumes, contributions from newly opened centers, and the impact of indexation. - The sale of Lumus Imaging to Affinity Equity Partners was valued at approximately $658 million (USD), representing a multiple of about 17 times the company's earnings (EBITDA). The divestment allows the former parent company, Healius, to concentrate on its core pathology business. - Advanced imaging modalities are expected to be the primary drivers of growth, with PET scans projected to increase by 23%, ultrasound by 16%, and CT by 15% over the next ten years. This trend necessitates investment in higher-performance imaging technology suitable for various locations, including smaller clinics and mobile units. - While national data on imaging sites of care has appeared stable, significant regional variations exist. For example, in Baltimore, 91% of mammography procedures take place outside of hospitals, and states like Florida, Arizona, and Colorado show a higher prevalence of freestanding imaging centers. - Regulatory changes are impacting reimbursement for diagnostic imaging. A recent CMS rule, effective January 1, 2025, unbundles and provides separate payment for certain high-cost diagnostic radiopharmaceuticals, which is expected to improve patient access and encourage innovation. However, radiologists are also facing broader Medicare reimbursement reductions under the Physician Fee Schedule. - Consolidation is not only happening at the corporate level but is also affecting the radiologist workforce. A recent study found that radiologists whose practices were closed were more likely to become subspecialists, contributing to a growing trend of subspecialization within the field. Between 2014 and 2021, the percentage of radiologists practicing as subspecialists grew from approximately 45.6% to 57%.
Key numbers
- The move follows a reported 40% jump in earnings, indicating strong performance and continued private equity interest in scaling up diagnostic imaging platforms.
- - The broader diagnostic imaging market is experiencing a significant shift, with roughly 40% of all imaging volumes now occurring in outpatient centers instead of hospitals.
- Projections indicate that advanced outpatient imaging will grow by 13-14% over the next decade.
- Private equity continues to drive consolidation in the fragmented imaging market; between 2013 and 2023, private equity firms acquired 151 radiology practices.
What happens next
- Projections indicate that advanced outpatient imaging will grow by 13-14% over the next decade.
- Advanced imaging modalities are expected to be the primary drivers of growth, with PET scans projected to increase by 23%, ultrasound by 16%, and CT by 15% over the next ten years.
- A recent CMS rule, effective January 1, 2025, unbundles and provides separate payment for certain high-cost diagnostic radiopharmaceuticals, which is expected to improve patient access and encourage innovation.
Quick answers
What happened in Lumus Imaging Raises Debt for Acquisitions?
Lumus Imaging, owned by Affinity Equity Partners, is increasing its debt facilities to fund further acquisitions and expansion. The move follows a reported 40% jump in earnings, indicating strong performance and continued private equity interest in scaling up diagnostic imaging platforms.
Why does Lumus Imaging Raises Debt for Acquisitions matter?
The broader diagnostic imaging market is experiencing a significant shift, with roughly 40% of all imaging volumes now occurring in outpatient centers instead of hospitals. This migration is driven by the lower costs and increased convenience offered by community-based settings. Projections indicate that advanced outpatient imaging will grow by 13-14% over the next decade. Private equity continues to drive consolidation in the fragmented imaging market; between 2013 and 2023, private equity firms acquired 151 radiology practices. This has resulted in 12% of all radiologists in the U.S. being employed by private equity-backed companies. This trend is fueled by the potential for economies of scale and increased negotiating power with payers. For the half-year ending December 31, 2024, Lumus Imaging reported a 13.3% increase in gross revenue to $286.5 million and a 50% jump in EBIT to $26.4 million. This growth was attributed to higher organic volumes, contributions from newly opened centers, and the impact of indexation. The sale of Lumus Imaging to Affinity Equity Partners was valued at approximately $658 million (USD), representing a multiple of about 17 times the company's earnings (EBITDA). The divestment allows the former parent company, Healius, to concentrate on its core pathology business. Advanced imaging modalities are expected to be the primary drivers of growth, with PET scans projected to increase by 23%, ultrasound by 16%, and CT by 15% over the next ten years. This trend necessitates investment in higher-performance imaging technology suitable for various locations, including smaller clinics and mobile units. While national data on imaging sites of care has appeared stable, significant regional variations exist. For example, in Baltimore, 91% of mammography procedures take place outside of hospitals, and states like Florida, Arizona, and Colorado show a higher prevalence of freestanding imaging centers. Regulatory changes are impacting reimbursement for diagnostic imaging. A recent CMS rule, effective January 1, 2025, unbundles and provides separate payment for certain high-cost diagnostic radiopharmaceuticals, which is expected to improve patient access and encourage innovation. However, radiologists are also facing broader Medicare reimbursement reductions under the Physician Fee Schedule. Consolidation is not only happening at the corporate level but is also affecting the radiologist workforce. A recent study found that radiologists whose practices were closed were more likely to become subspecialists, contributing to a growing trend of subspecialization within the field. Between 2014 and 2021, the percentage of radiologists practicing as subspecialists grew from approximately 45.6% to 57%.
