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.
- 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%.
