Onex Puts Center for Diagnostic Imaging On the Block

Late August is supposed to be slow for M&A, but I’m finding the opposite today. There are two deals, both involving Onex Corp., on tap.

First off, Onex has put portfolio company Center for Diagnostic Imaging up for sale, sources say. J.P. Morgan Chase is advising on the deal. It’s not clear who is bidding for CDI or what it could go for.

Onex is the large, publicly traded investment firm in Canada. Onex Partners, its PE unit, bought CDI in 2005 in a deal valued at $160 million, according to press reports from that time.

Minneapolis-based CDI is a provider of diagnostic and therapeutic radiology services in the U.S. It operates 58 outpatient diagnostic imaging centers in 12 markets. Onex Partners invested $73 million in CDI, which includes $17 million from Onex, the parent company. CDI had annual revenue of $141 million in 2009, according to the firm’s website.

CDI CEO Robert Baumgartner confirmed that the company is considering strategic alternatives. Baumgartner says the sales process is at an early point.

“We’ve been extremely pleased with our relationship with Onex, but we are exploring alternatives at this point,” he told peHUB.

Onex owns 81% of CDI, including 19% held by the parent firm. The balance is held by company management and radiologists.

The second deal involves Onex, but this time as a buyer. Riverside Partners, the Boston PE shop, is selling Quantum Medical Imaging to Onex Partners, sources tell peHUB. News of the deal appeared yesterday on the FTC website.

Quantum Imaging makes and designs medical radiographic systems for hospitals and image centers.

Riverside acquired Quantum via a recap in 2005. The Quantum investment came from Riverside’s third fund which raised $225 million in 2006. The PE shop invests in health care and technology companies with $5 million to $25 million EBITDA.

Officials for Onex and Riverside could not be reached for comment.