TECH-3367
PET-CT Center in North East with a Newer Scanner


Good Growth Potential for a Local Owner

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This center was originally started by a radiologist, in 2003. It is in a modern medical building, across from a teaching hospital, in a very affluent area. The current owner, also a radiologist, purchased this center about four years ago and is 100% owner of the Center. The owner is an absentee owner, living in another state in the Midwest. Originally, his plans were to relocate to this area with his family, but later he decided against moving. This is the reason he is looking to sell the Center now.

The Center is the only registered IDEAS study imaging center in the area and performs 5-10 Amyvid scans per month. In October 2015, the Center bought a brand-new Discovery IQ PET-CT system from GE Healthcare.

In 2016, the hospital across from the Center, started its own PET/CT center which affected the business of the center significantly in the last two years. However, the revenue has stabilized now and can increase with more attention of the owner who is local and who can help market it better. For first couple of years before this new competition, being out of state, was not much of an issue, but now the owner feels that in order to grow the center and compete effectively, local presence of the owner is required.

Amongst significant growth prospects, the Center has entered into an agreement to be the exclusive imaging center for another investigational radiotracer that is estimated to account for an additional 100 patients needing 3-4 scans over the next 3 years at $1,200 each. This will translate to annual revenue of about $140,000 per year once the study starts. One can do additional research studies if this Center is marketed better. There is also an opportunity to boost revenues from CT scans from a vascular surgery group – however it needs a radiologist on site.

KEY ADVANTAGES

FINANCIALS

Gross Revenue: $950K
Adjusted EBITDA: $260K*

*Note that the PET/CT Lease is technically an operating lease and hence its entire payment (principal and interest) is treated as an expense. If this was a capital lease, only interest would be in the income statement and hence the EBITDA for 2017 would be higher by $226K. In many ways, the PET/CT lease is a hybrid since after the 7-year lease (in November 2022), the Fair Market Value of the equipment would be quite cheap and so it can be bought without much expense.

ASKING PRICE

The seller is looking for the buyer to take over the center by taking on existing SBA Loan (balance a little less than $1.3 million), pay the operating lease on the scanner and assume lease on the real estate.

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