Radiology players seek buyers: Excellere’s LucidHealth, founder-run SimonMed

William Blair advises PE-backed LucidHealth, while SimonMed turns to Jefferies.

Representing one of two radiology platforms currently in the market, Excellere Partners is fielding indications of interest for LucidHealth, three sources familiar with the matter told PE Hub

Columbus, Ohio-headquartered LucidHealth is receiving sell-side financial advice from William Blair, the sources said. One of the people said indications of interest are due January 12. 

LucidHealth is being marketed on the back of $60 million of adjusted EBITDA in 2020, two of the sources said. They added that the sellers hope to command an EBITDA multiple in the low- to mid-teens. 

For Denver’s Excellere Partners, its investment in LucidHealth (formerly Premier Imaging Ventures) dates to October 2016. Executing a buy-and-build strategy under Excellere, the business has grown significantly in the period since – with EBITDA of around $16 million in 2018, one of the people noted.

Physician-led LucidHealth provides outsourced radiology services to hospitals, clinics and outpatient imaging centers, and has completed more than 1.7 million interpretations per year, according to Excellere’s website. 

In May 2020, LucidHealth installed Asif Ahmad as CEO, following the retirement of Marcia Flaherty after a 20-year tenure with the organization. Ahmad’s former executive roles include tenures as CEO of Dimensional Dental and CEO of Anthelio Health. 

LucidHealth isn’t the only radiology business on the auction block. The process comes as a founder-led SimonMed evaluates a sale via Jefferies, sources said. 

The SimonMed process, aimed exclusively at sponsors, is anticipated to field first round bids later this month, one of the people said. 

The sell-side is marketing around $75 million in adjusted 2020 EBITDA, sources said. 

Led by Dr John Simon, SimonMed operates a hybrid model, serving as both an outpatient diagnostic imaging provider as well as an operator of its own large radiology group. SimonMed’s practice consists of 200 highly experienced subspecialty-trained radiologists, operating across nine states with more than 150 accredited facilities, according to its website.

The brewing activity comes on the heels of Radiology Partners’ December acquisition of the radiology business from Mednax, which commanded an approximately $885 million valuation.

Rad Partners – the largest radiology physician practice in the country – scored a $700 million investment in July 2019 from Starr Investment Holdings, which joined existing investor New Enterprise Associates. 

Although Rad Partners has been on an M&A tear as of late and may have its hands full, two sources said they would not put it by the company to go after LucidHealth – particularly given the financial wherewithal of its financial backer. “Starr has a big checkbook,” one source commented. Other related PE-backed platforms include Wellspring Capital Management’s Center for Diagnostic Imaging, though Lucid could be too sizable an acquisition target, this person said.

With a network of outpatient-based diagnostic-imaging centers spanning more than 40 states, CDI is one of the largest such US providers behind publicly traded RadNet, whose current market cap is just north of $1 billion. Wellspring’s 2018 deal for CDI was said to value the business a little south of $750 million, PE Hub wrote at the time. 

Other PE-backed players in radiology include US Radiology, a portfolio company of Welsh, Carson, Anderson & Stowe.

Excellere, William Blair and Jefferies declined to comment. Executives of SimonMed and LucidHealth could not be reached.